The RBA Minutes published overnight suggest the Aussie is unlikely to appreciate much further in my view. The RBA warned that the recent strength in the Aussie Dollar over the last few months would be a drag on their efforts to rebalance the economy. Whilst I don’t feel this will result in any kind of interest rate change given the recent cuts (I think we will see a period of stability in that regard), it does suggest the RBA are taking a close interest in the strength of the Aussie Dollar. To this end I would not be surprised to see some other form of intervention should the AUD begin to appreciate particularly against the USD.
We still have UK inflation figures to be published this morning at 9.30 and the US equivalent at 1.30 so both of these could see some movement. Sterling will also be backed up by a reasonable showing in the jobs figures due out tomorrow morning in my view. On the Euro we have economic sentiment figures due out this morning, and wider European inflation figures out on Wednesday morning. German figures released late last week came in on target, but if the European figures as a whole don’t match this we could see Euro weakness. Inflation is becoming a worry for the ECB so the longer it remains low, the more likely we are to see some form of intervention by them. Who knows we may even get to see what these unprecedented measures are that Mario Draghi keeps hinting at!
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