Aussie declines after RBA minutes; Greenback broadly supported

Aussie declines after RBA minutes; Greenback broadly supported

17 November 2015, 07:42
News
0
529

The Aussie advanced on Tuesday after minutes of the central bank's November board meeting noted there was room for further easing, although with overall conditions accomodative.

AUD/USD traded at 0.7086, down 0.14%, while NZD/USD traded at 0.6462, down 0.5%.

The inflation outlook provides further space for easing if necessary, the Reserve Bank of Australia said Tuesday in the minutes of its November board meeting at which it held rates unchanged at a record low 2%.

Earlier in the day, Reserve Bank of Australia Assistant Governor Christopher Kent noted that lower commodity prices and a slower China make it hard to forecast the next turns of the economic cycle.

USD/JPY last traded at 123.37, up 0.14%.

Data released on Monday showed that Japan has slipped into recession. The country's gross domestic product dipped by an annual 0.8% in the three months to September, after a 1.2% contraction in the second quarter. Two consecutive quarters of declines mean the economy is in a technical recession.

The data further pressured the government and the Bank of Japan to widen stimulus measures initiated by Prime Minister Shinzo Abe.

Overnight, the greenback remained broadly higher against the other major currencies in a subdued trade on Monday, despite the release of downbeat manufacturing activity data from New York. Mounting expectations for a December rate increase by the Federal Reserve continued to lend support to the currency. Fed Vice-Chair Stanley Fischer said last week it "may be appropriate" for the Fed to begin raising rates next month.

Yesterday, the Federal Reserve Bank of New York reported that its general business conditions gauge improved to -10.7 in November, marking the fourth consecutive month of contraction, from a reading of -11.4 in October. Economists had expected the index to rise to -6.0 in November.

Demand for shelter assets was driven higher after terrorists killed more 132 people in Paris on Friday, prompting retaliatory French air strikes against Islamic State in Syria. Killings also happened in Lebanon and Iraq last week.

The shared currency was already under pressure from boosted expectations that the European Central Bank will enlarge its stimulus program, aimed at boosting price growth in the euro area, before the year-end.

EUR/USD was last at 1.0663, down 0.22%.

Share it with friends: