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Currency Market Analysis

Aug 20, 2019 | Currency Market Analysis

Global Themes

Aussie unmoved as governments talk stimulus

Global sharemarkets were higher overnight as major governments looked to stimulus programs but the Australian dollar was unable to benefit.

European markets were boosted by hopes of a large German stimulus program while hopes for a temporary cut in US payroll tax helped US shares.

In Germany, the benchmark Dax index climbed 1.3% while the US’s Dow Jones index was up 1.0%.

Can’t get started

The Australian dollar didn’t benefit as the global uplift in confidence boosted US bond yields making the AUD less attractive on a relative basis.

The AUDUSD fell 0.3% while the AUDEUR dropped 0.2%.

The Aussie was higher versus the Japanese yen and New Zealand dollar.

RBA minutes

Today’s local focus comes from the Reserve Bank of Australia with the bank’s minutes from their 6 August meeting due at 11.30am AEST

The RBA looks to be on hold for the moment but markets believe the central bank will cut rates twice by next February.

Tomorrow night, the central bank focus continues, with the Federal Reserve’s minutes from their most recent meeting likely to be scrutinised.

By Steven Dooley, Currency Strategist APAC

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