Bell FX Currency Outlook: With the AUD trading in familiar ranges, the focus will be on the RBA's post-meeting statement released at 14:30AEST today.Australia: We open this financial year some US 0.03 higher from where it started 2013/14. It opened last financial year at 0.9131 and over thecourse of the year has been 4.7c lower and 6.3c higher.
The market are not expecting any change to the cash rate, the post-meeting statement is likely to continue to reflect the uncertainties around the outlook in line with the sentiment in the Minutes from the June meeting.
The RBA may soften its language in relation to the outlook for consumption given the lower-than-expected growth in Q1 consumption, weaker anecdotes from the retail sector and the decline in consumer confidence. It may also add further colour to its thinking on the high AUD, given that the dollar has risen nearly US 2 cents since the previous meeting, while commodity prices have moved broadly lower.
The weekly ANZ-Roy Morgan measure of consumer confidence is published this morning and while it has improved modestly in recent weeks, it remains well below its pre-budget levels.
Majors: The USD declined as month end flow dominated and US economic data continued to improve. With gains in the GBP, EUR, JPY, AUD, and the NZD struggled as the June business survey disappointed and Treasury said that the terms of trade had likely peaked.
Euro-zone core inflation for June came in a point higher than expected at 0.8% y-o-y ahead of the ECB meeting. In China today, the official manufacturing PMI for June will be published at 11:00AEST and is expected to have risen modestly to 51.2 (mkt: 51.0) from 50.8.
Economic Calendar1 JUL CH Manufacturing PMI JunRBA Cash Rate Target JulGE Unemployment Rate JunUS ISM Manufacturing PMI Jun
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