Forex Daily Recap – RBA Minutes Hinted for a Rate Cut Triggering Heavy Selling in the Aussie PairCrude Oil WTI Futures continued to climb the ladder amid OPEC-led supply cut fears. PM May stated that she will give MPs last chance to back her “new improvised deal”. EUR/USD pair uplifted on USD plunge.
The Aussie pair opened up on Tuesday morning displaying a steep fall of around 0.73%. The heavy selling pressure was following the release of RBA meeting minutes. As per reports, the Bank had alluded that it may opt for a rate cut in June. “As in the previous meeting, members discussed the scenario where inflation did not move any higher and unemployment trended up, recognizing that in those circumstances a decrease in the cash rate would likely be appropriate.”, the minutes read.
The Bank Officials have noted that unemployment in the nation was increasing multifold and increasing cash flow was the best option left. Hence, the Bank Officials hinted that they might decrease the interest rates soon. The AUD/USD pair continued to move range-bounded between 0.6865/85 levels thereon. The pessimistic sentiment around the USD Index helped the pair to recover some part of the losses incurred earlier the day. However, the AUD bears combined with the USD bears restrained the Aussie pair from moving upwards.
The Euro pair was showing some good recovery signs since last few sessions. The pair had dropped significantly in the opening hours, reaching near 1.1140 levels. The earlier hammering in the EUR/USD pair was due to the robust growing USD Index. The Greenback was up in the Asian trading session as the market expected a bullish Home Sales data this time. However, the US April MoM Existing Home Sales came out lower than estimates, recording 5.19 million. All the gains developed over mere expectation got evaporated. The US Dollar Index slipped from 98.10 levels to 97.85 levels, or 0.26% drop. Quite impressively, the major Greenback rival – “EUR/USD” took advantage of the scenario and jumped 0.31%. Along with the Dollar plunge, higher-than-expected Eurozone May Consumer Confidence Index supported the Euro upliftment. The Index had reported a negative 6.5 over a negative 7.6 forecast.
In the Asian session, the GBP/USD pair was trading near 1.2727 levels. Laterwards, the pair took a downturn reaching near 1.2689 levels. This plunge in the pair occurred after the UK Treasury Committee inflation report hearings. The report stood negative, and the sentiments of inflation hitting the UK’s economy pushed the cable down. Also, the release of CBI’s May Industrial Trends Survey Orders MoM added in ‘pair’s pullback. The Survey appeared negative 10 points than anticipated negative 5 points. After 11:15 GMT, there was a reverse picture with the pair. The cable shot up, reaching 1.2743 levels in the morning session. Today, the UK Prime Minister met the cabinet to discuss the improvised Brexit-deal. Following the PM’s stance, investors remained optimistic on Brexit and increased demand for GBP. During the European session, the Greenback stood reluctant to the bearish US economic data and continued to move upwards. The rising US Dollar Index pushed the GBP/USD pair downwards.
The Loonie remained slightly seesawed throughout the day. The USD/CAD pair marked the day’s low near 1.3395 levels. The pair had slumped over rising Oil prices and USD fall. OPEC-led supply cuts and the Middle East tensions drove the Crude prices upwards. The Crude Oil WTI Futures knocked off the day’s high near $63.80 per barrel. In the meanwhile, US-Iran disputes continued set investors under fear. However, the rising uncertainties revolving around US-Sino trade talks capped the crude gains.