USD Graphic Rewind 07.06
USD INDEX GRAPHIC REWIND
The dollar remained largely range-bound yesterday as light trade was the theme with US traders out for the Independence Day holiday. Turning to the over-night Asian session, the dollar was well bid early as traders expected a dovish statement from the RBA and regional equity markets continued their downward trend. However, the Shanghai Composite Index reversed early losses to bounce smartly away from its 14-month low, lifting regional equities off their lows. The RBA left rates on hold, as was widely expected, but its accompanying statement was far less dovish than expected and even had some hawkish hints, lifting the Aussie and riskier assets, pushing the dollar lower.
Looking ahead, US equity futures have reversed 1%+ losses on the back of the RBA comments and subsequent rising market sentiment but it remains to be seen if this single event can keep risk aversion, which is still prevalent, at bay.
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