A Light Economic Calendar Leaves the Greenback on the Defensive

Earlier in the Day:

It’s was a quiet start to the day on the economic calendar this morning.  There were no material stats to provide the markets with direction through the Asian session.

On the monetary policy front, however, the RBA meeting minutes garnered interest in the early part of the day.

Away from the economic calendar, there was little for the markets to consider. Tensions between the U.S and China, COVID-19 numbers, and the continued lack of progress towards a U.S stimulus package remained in focus.

For the Aussie Dollar

Early this morning, the RBA released the minutes from the 4^th August meeting, where the RBA held rates unchanged. There had been some uncertainty ahead of the minutes, with the recent spike in new COVID-19 cases in Victoria questioning the RBA’s optimistic outlook.

Key points from the minutes included:

• Members agreed that the lengthening and tightening of restrictions in Melbourne and Victoria was a setback. This is expected to weigh on overall domestic activity in the 3^rd
• Additionally, there will likely be negative effects on the confidence of households and businesses.
• Members noted that general uncertainty was affecting demand broadly, with the economic recovery slowing.
• The extension of government policy support would continue to support household incomes and assist the recovery over the following few quarters.
• Recent surveys indicated that the weakness in non-mining business investment would be more pronounced in the period ahead.
• While employment had been recovering since May, weekly payroll data reflected a loss of momentum in late June and early July.
• Significant spare capacity in the labor market was constraining wages growth.
• The economic outlook remains highly uncertain and will depend upon the containment of the coronavirus.
• While the economic downturn was less severe than expected, the recovery was likely to be slower than expected.

The Aussie Dollar moved from $0.72238 to $0.72200 upon release of the minutes. At the time of writing, the Aussie Dollar was up by 0.08% to $0.72200.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.18% ¥105.81 against the U.S Dollar, while the Kiwi Dollar was down by 0.11% to $0.6551.

The Day Ahead:

For the EUR

It’s another particularly quiet day ahead on the economic calendar. There are no material stats due out to provide the EUR with direction.

The lack of stats will continue to leave the EUR in the hands of COVID-19 updates, geopolitics, and U.S stimulus talks.

At the time of writing, the EUR was up by 0.13% to $1.1886.

For the Pound

It’s also another particularly quiet day ahead on the economic calendar. There are no material stats to provide the Pound with direction.

A lack of stats will continue to leave the Pound in the hands of any Brexit chatter.

At the time of writing, the Pound was up by 0.18% to $1.3126.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. Key stats include July’s building permits and housing start figures.

Barring particularly dire numbers, however, we would expect the stats to have a muted impact on the Greenback.

Throughout the day, expect chatter from Beijing and Washington to remain key drivers. The markets continue to focus on the COVID-19 stimulus package and U.S – China tensions.

At the time of writing, the Dollar Spot Index was down by 0.19% to 92.6770.

For the Loonie

It’s a quiet day on the economic data front, with no material stats to provide the Loonie with direction.

The Loonie will remain in the hands of sentiment towards consumption. Failure by lawmakers to reach an agreement on the COVID-19 package would pin the Loonie back.

At the time of writing, the Loonie was up by 0.08% to C$1.3205 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.