TALKING POINTS – AUSTRALIAN DOLLAR, NEW ZEALAND DOLLAR, YEN, FRANC
- Australian Dollar a hair higher after status-quo RBA rate decision
- NZ Dollar down with bond yields before RBNZ policy announcement
- Yen, Franc at risk as stock index futures hint at risk-on mood ahead
The Australian Dollar ticked a hair higher in Asia Pacific trade as the RBA policy announcement stuck firmly to the status quo, offering no signs of dovish pivot despite recently disappointing CPI data. The statement issued alongside the widely expected decision to keep the cash rate unchanged at 1.5 percent said “once-off declines” may see inflation lower than previously projected this year before a rebound in 2019-20.
Meanwhile, the New Zealand Dollar traded modestly lower. The move tracked a drop in local bond yields, which may reflect pre-positioning ahead of the upcoming RBNZ rate decision. No changes in the policy stance are expected but recent disappointments in economic news flow might trigger a dovish shift in forward guidance. As it stands, markets price in a hike in the fourth quarter of 2019 as the next adjustment.
A modest offering of second-tier economic data offers little to inspire trend development across currency markets in the hours ahead. That might put sentiment trends at the forefront once again. Futures tracking key European and US equities benchmarks are pointing higher, hinting that an upbeat mood may prevail. On balance, that could bode ill for the frequently anti-risk Japanese Yen and Swiss Franc.
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ASIA PACIFIC TRADING SESSION
EUROPEAN TRADING SESSION
** All times listed in GMT. See the full economic calendar here.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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