Bell FX Currency Outlook: The AUD sits perilously close to 0.9400, almost exactly where it went out at the end of last week.Australia: AUD stability comes despite a fresh fall in iron ore prices, down a further 2.1% to USD89.0 per tonne - its lowest level since September 2012.
The RBA June Board meeting Minutes will be published today at 11:30AEST. In the post-meeting statement, the RBA did not explicitly mention the deterioration in consumer confidence but comments around the improvement in business confidence and conditions compared with a year ago were removed.
There is a risk the Minutes could read a little more dovishly than the post-meeting statement.
Majors: The USD eased back marginally as tensions in Iraq drove a selloff in emerging market currencies against other low yielders like theJPY and CHF. Moves were very limited elsewhere as the market awaits the decision from the FOMC later this week. There, expectations are thatthe Fed will taper by a further USD10bn, and lower its unemployment forecast.
For the USD, the rhetoric of Chairperson Yellen at the post meeting press conference will be key and this in turn will set the direction for the AUD. With iron ore prices setting another fresh low, and the appreciation of the AUD increasingly dependent on the low volatility environment, any hints about the trajectory of US rates will be key.
Three medium-sized Chinese commercial banks, confirmed that the PBoC approved a 50bps cut to the reserve requirement ratio (RRR) last Friday,with cuts for other banks reported. Cuts are likely to be extended to other institutions to bolster liquidity as the PBoC seeks to bolster economicactivity. Economic Calendar16 JUN AU New Motor Vehicle Sales MayAU RBA Minutes JunEC ZEW Survey JunUS CPI MoM YoY
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