Greenback Recovery ahead of FOMC Minutes

Key Movers

The Australian dollar moved lower through trade on Tuesday marking a second consecutive daily depreciation; testing supports at 0.7850 and 0.7830. The RBA’s latest minutes offered little to excite investors and did little to inspire any upward AUD momentum instead leaving the currency at the mercy of offshore stimuli. As risk appetite returns to the market the U.S dollar recovery continued and found additional support in upbeat and stronger than anticipated retail sales data. Forcing the Aussie through one month lows at 0.7809 the greenback touched three week highs. Opening this morning buying 0.7819 U.S cents attentions now turn to domestic wage price growth and a heavy U.S macroeconomic docket headlined by FOMC meeting minutes for direction through midweek trade.    


The New Zealand dollar moved lower through trade on Tuesday as upbeat U.S retail sales data and a renewed appetite for risk saw investors buy back into the world’s base currency. With little domestic data on hand to drive direction the kiwi suffered at the hands of easing geopolitical tensions and an increasing demand for riskier assets, such as U.S stocks.  Consolidating moves below 0.73 the NZD touched intraday lows at 0.7229 and opens this morning buying just 0.7233 U.S cents. Attentions now turn to a raft of U.S macroeconomic data and FOMC meeting minutes for direction through Wednesday. An upbeat print and hawkish Federal Reserve could prompt a move back below 0.72 and test of supports at 0.7190.


A lift in United States Retail Sales for the month of July by 0.6% saw the U.S. Dollar advance to its highest level in four weeks. Supported by a selloff in safe haven currencies, The US Dollar index (DXY) advanced by another 0.4%. Supportive of the rally was the latest Empire State Manufacturing Index reading which jumped to its highest level in three years. With the broader rally on the Greenback, Euro pulled back to support at the 1.17 handle. USD/JPY rallied to a high overnight of 110.85 after a reversal in risk sentiment and up 1% for the day. Markets look ahead to the release of FOMC meeting minutes this evening.