The Australian dollar came under pressure against the greenback on the unchanged cash rate by the Reserve Bank of Australia. Meanwhile, the yen got a lift amid geopolitical concerns induced by another North Korea missile test. The euro and sterling were broadly steady against the US dollar.
The RBA left its cash rate unchanged at a historic low of 1.5% during its policy meeting earlier today. While this was widely expected by the markets, the aussie was under pressure against the greenback during the Asian session, having dropped 0.7% to 0.7606. In the global context, Australia’s central bank is diverging from its peers that are being increasingly more hawkish. This could have led to a disappointment among investors.
The yen was boosted against the US dollar by geopolitical concerns after news of another North Korean missile test during early hours in Asia. Dollar/yen broke below the 113 level as the Asian trading session was coming to a close. This comes after yesterday’s high of 113.46, its strongest since mid-May.
The dollar index that gauges the greenback against a basket of six major currencies inched down, last trading at 96.147.
The euro was steady against the dollar for most of the Asian session, however it came under pressure in early European trading hours on lower than expected change in Spanish unemployment. A data point that measures the unemployed individuals in Spain has fallen by 98,300 in June, below the expected level of 120,300 and May’s figure of 111,900. Euro/dollar was last trading at 1.1361.
Sterling was edging higher against the dollar, trading in the range of $1.2922-$1.2958 during the Asian session. All eyes will be on the construction PMI (to be released at 8:30 GMT), which is expected to temper to 55 from May’s 56. Any positive surprise to this could lend a boost to the pound.
Looking at commodities, oil prices were under pressure, trending down after eight days of consecutive gains. US crude was last trading at $46.94 a barrel, while Brent crude inched down to $49.53.
Gold was trending higher on dollar weakness, reaching $1,225.30 an ounce, after yesterday’s one-and-a-half-month low of $1,1218.45.
Looking ahead, not many events are scheduled that could move the forex market significantly. ECB Executive Board member Peter Praet will be speaking later in the day. His speech might give more colour on the ECB thinking. The US markets will be closed for the July 4th holiday.
