Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX.
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Global markets remained unstable due to ongoing concerns about the US economy, leading investors to be more cautious. Stock markets around the world experienced significant declines. Specifically, Japan’s Nikkei index fell by 12.4%, its largest drop since 1987. In the US, the S&P 500 decreased by 3.2%, while in Europe, the Euro Stoxx 50 dropped by 1.4%, and the UK’s FTSE 100 was down by 2.0%. Additionally, the yield on the US 10-year bond fell by 2bps to 3.77%, indicating increased demand for safer investments.
The US ISM services index increased by 2.6 points to 51.4 in July, slightly exceeding market expectations of 51.0. However, this small beat didn’t significantly change the overall market sentiment. Production rose by 4.9 points, new orders increased by 5.1 points, and employment improved by 5.0 points. Prices also firmed up, rising by 0.7 points.
The USD kept weakening as the yen outperformed other G10 currencies.
The RBA is widely anticipated to keep its policy rate steady at 4.35%. It’s interesting to note how quickly the market’s expectations have shifted, just a few weeks ago, there was talk of a potential rate hike, but now the focus is on maintaining the rate, with a possible cut by the end of the year. Attention will be on the updated forecasts and Governor Bullock’s remarks during the press conference. Later in the evening, Euro Zone retail sales and the US trade balance will round out a relatively quiet day for data.
Economic Data
• AU – RBA Cash rate
• JP – Jun. Labor Cash Earnings
• UK – Jul. S&P Global UK Construction PMI
• EU – Jun. Retail Sales MoM
• US – Jun. Trade Balance
• CA – Jul. PMI’s
Mid market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6512 |
| AUD/NZD | 1.0947 |
| AUD/JPY | 94.53 |
| AUD/CNY | 4.6528 |
| AUD/EUR | 0.5943 |
| AUD/GBP | 0.5092 |
AUD/USD 24 Hour
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