Article Highlights

  • RBA kept interest rates on hold at 2.00% as expected
  • RBA statement: Monetary policy needs to be accommodative
  • RBA statement: Commodity prices are declining significantly
  • Australia’s AIG construction index fell from 47.8 to 46.4 in June
  • New Zealand’s NZIER business confidence index down from 23 to 5
  • Chinese equities resume their declines
  • U.K. manufacturing and industrial production reports due
  • EU Summit and Eurogroup meetings going on today
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All eyes and ears were on RBA Governor Glenn Stevens and his gang of policymakers in today’s Asian forex trading session, as the central bank announced its rate statement. The RBA decided to keep interest rates on hold at 2.00% for the time being while maintaining that monetary policy should stay accommodative.

Stevens also noted that commodity prices have been declining significantly and that overall economic growth remains below its long-term average. Prior to this, Australia reported a decline in its AIG construction index from 47.8 to 46.4 in June.

AUD/USD consolidated prior to the actual event then popped up to the .7500 handle after the announcement (-0.09%). AUD/JPY is hovering close to the 92.00 mark (-0.03%), even as Governor Stevens reiterated that they’d like to see further Aussie appreciation against its other forex rivals.

New Zealand also had its share of bleak data, with the NZIER business confidence index tumbling from 23 to 5 in the second quarter. NZD/USD is testing its monthly lows around the .6660 level (-0.30%) and NZD/JPY is is down 18 pips (-0.22%).

Now that these economic data releases are out of the way, the Greek debt drama could once again steal the forex spotlight with the EU Summit and Eurogroup meetings going on today. These discussions could be interesting since newly-appointed Finance Minister Euclid Tsakalotos might be more willing to compromise with Greece’s creditors, unlike former FM Varoufakis a.k.a resident bad boy.

Nonetheless, the lack of any agreement in the next few hours could keep the euro’s gains in check, especially since the ECB refused to increase its emergency lending fund to Greece and capital controls are still in place until tomorrow.

As for the pound, the upcoming U.K. manufacturing and industrial production figures could have a say in the British currency’s price action. Analysts are expecting to see a 0.1% rebound in manufacturing production and a 0.2% decline in industrial production for May. Also lined up today are Switzerland’s unemployment rate and foreign currency reserves data. Keep an eye out for any signs that the SNB might’ve intervened in the forex market!

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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