The Australian dollar (AUD) holds fair value against the U.S. dollar (USD) at ∼0.6500. Traders are keenly awaiting the Reserve Bank of Australia’s (RBA) Minutes. That said, the recent consolidation under the 0.6500 level puts AUD/USD at the top of a several week consolidation range. This play signals a very fear-based mood from speculators.
As the Asian session progresses, traders remain vigilant for insights regarding the RBA’s policy outlook, which could impact the Australian dollar’s trajectory. Traders are excitedly looking ahead to these Minutes. They understand how much a marked change in monetary policy direction might move the currency markets.
At the same time, the USD/JPY currency pair has recently made bullish moves. That all changed as it quickly rebounded after hitting a one-week low. In the Asian session it regained some 25 pips from earlier fall. In a measured move, the USD has rebounded after falling to a six-week nadir. This increase is supported by a positive risk sentiment, which decreases pull of the safe-haven Japanese yen (JPY).
Prices for bullion have come off their most recent highs, pulling back from a nearly four-week high. Analysts largely agree that a major crash of gold prices is not in the cards, even after this recent dip. Demand for safe-haven assets continues to be robust as market uncertainties continue to linger.
To summarize, the prevailing market conditions are a combination of cautious optimism tempered with some strategic positioning on the part of traders. They would be excited about the RBA Minutes. There is a huge expectation that anything that is released will have a profound effect on currency flows.
“AUD/USD holds steady around 0.6500 ahead of RBA Minutes” – FXStreet
Equities Market observers continue to point out a very positive risk tone in broader market activity. For currency traders, the challenges continue. Traders remain jittery. Perhaps the old adage “not out of the woods yet” rings true, as they prepare for possible volatility from new economic indicators still to come.
“USD/JPY bounces off one-week low; not out of the woods yet” – FXStreet
Traders are adopting a wait and see attitude. They’re painstakingly balancing a short-term look at emerging market shifts with a greater focus on all economic indicators in coming months and years.