Inflation figures out of Australia were today’s main data release during Asian session trading. The softer than expected data led to the aussie posting losses. Beyond that, the dollar index seems to be maintaining some positive momentum following yesterday’s upbeat consumer confidence report.
The dollar’s index against a basket of currencies was up 0.2% as Asian traders were about to complete their trading day. It stood above the 94 mark, but not far above 93.64, the 13-month low reached yesterday. Against the yen, the US currency was not much changed. Dollar/yen last eyed the 112 handle. Yesterday the pair finished the day 0.7% higher. The Federal Reserve will complete its two-day meeting later in the day. It is widely expected to maintain interest rates at their current levels and investors will mainly focus on rate guidance throughout the rest of the year, as well as on details regarding when it will start reducing the size of its balance sheet.
Political developments have in large part been driving the dollar to a significant extent recently and new deliberations by the US Senate to repeal and replace Obamacare will also be watched by forex market participants.
In other dollar pairs, euro/dollar and pound/dollar were last down 0.2% and 0.1% on the day. Yesterday, euro/dollar rose to its highest since late August 2015 when it hit 1.1712, while pound/dollar climbed to a more than one-week high of 1.3083.
Moving to today’s major release during the Asian session, Australian consumer prices rose 1.9% year-on-year in the second quarter of the year. This fell short of expectations for a rise by 2.2% and was also below the two-and-a-half-year high of 2.1% during the first quarter of the year. On a quarterly basis, the inflation rate stood at 0.2% in the second quarter, below the 0.4% expected and the previous quarter’s 0.5%. The Australian dollar fell on the data relative to its US counterpart. Aussie/dollar last traded at 0.7892, down 0.6% on the day.
New Zealand trade data for June showed the country posting a trade surplus of NZ$242 million during the month. The local dollar edged slightly higher relative to the US dollar upon release of the data. Kiwi/dollar last traded at 0.7423, up on the day though not by much.
Turning to commodities, gold was last down 0.3%, trading at $1245.04 an ounce. WTI and Brent crude were both up 0.8% and 1.0%, at $48.38 and $50.61 respectively. Both benchmarks finished the day higher in the two preceding days, recording considerable gains.
Beyond the FOMC statement upon completion of the Fed’s meeting, UK preliminary GDP estimates for the second quarter of the year and the Energy Information Administration’s (EIA) weekly report on US crude stockpiles will also be in focus.
