Rabobank's Senior Macro Strategist Bas van Geffen reports that the Australian Dollar (AUD) slipped briefly after the RBA left its policy rate unchanged, as markets interpreted the statement and downgraded growth and inflation forecasts as dovish.
The Australian Dollar (AUD) attracts bids against its major currency peers after the Reserve Bank of Australia’s (RBA) monetary policy decision, but is still trading marginally lower at around 0.7050 against the US Dollar (USD) during the European trading session on Tuesday.
USD/CAD trades around 1.3935 on Tuesday at the time of writing, virtually unchanged on the day with a modest 0.03% decline.
Oil prices rally for the second consecutive day on Tuesday, with the barrel of the US benchmark West Texas Intermediate (WTI) trading at $83.50 during the European trading session.
John Velis at BNY Markets reiterates that he expects no Federal Reserve rate hikes this year, even as risks remain skewed to the upside.
Silver prices (XAG/USD) fell on Tuesday, according to FXStreet data. Silver trades at $64.78 per troy ounce, down 2.72% from the $66.59 it cost on Monday.
Deutsche Bank strategists highlight that Brent Oil has broken above $85, closing near $88 as the Strait of Hormuz remains shut and rhetoric between the US and Iran escalates.
ING’s Chris Turner notes that FX volatility is falling as investors appear comfortable with the Federal Reserve holding or potentially tightening rates in September.
The GBP/JPY cross recovers a modest intraday dip and climbs above the 215.00 psychological mark during the first half of the European session on Tuesday.
EUR/CAD continues its losing streak for the fifth consecutive day, trading around 1.6080 during the European hours on Tuesday. The Euro (EUR) is under pressure as rising risk aversion, driven by escalating US-Iran tensions, weighs on the cross.
Societe Generale strategists note the Japanese Yen (JPY) remains the main G10 laggard despite higher domestic yields and Bank of Japan (BoJ) tightening.
The Euro (EUR) extends losses for the second consecutive day against the British Pound (GBP) on Tuesday, weighed by a cautious market mood as hopes of a swift end to Iran’s war wane and Oil prices climb. The EUR USD pair remains capped below 0.8550 after hitting two-week lows at 0.8536 on Monday.
TD Securities’ Prashant Newnaha and Alex Loo note that the Reserve Bank of Australia left the cash rate at 4.35% in a unanimous decision, with the Statement and updated forecasts sounding less hawkish than expected.
Dow Jones futures decline by 0.11% to trade around 54,000 during European hours on Tuesday. Meanwhile, S&P 500 futures are steady around 7,770 and Nasdaq 100 futures gain 0.12%, trading near 29,770.
The US Dollar (USD) extends its Monday recovery move on Tuesday, as rising Oil prices due to prolonged fears of energy supply disruption keep global inflation expectations de-anchored.
Commerzbank’s Tatha Ghose describes recent Forint weakness as a high-beta correction that only partly erases post-election outperformance.
NZD/USD extends its losses for the second successive day, trading around 0.5880 during the European hours on Tuesday. The pair depreciates as the US Dollar (USD) gains on increased safe-haven demand amid heightened geopolitical tensions.
The USD/JPY pair reverses an intraday dip to sub-159.00 levels and climbs to the top end of its daily range during the early part of the European session on Tuesday.
Deutsche Bank strategists report that US equities saw modest losses as Oil extended gains, with the S&P 500 easing slightly from record highs and chipmakers leading declines. Energy and health care outperformed.
Silver (XAG/USD) trades lower on Tuesday, retreating to levels below $64.50, after rejection at seven-week highs around $66.60 on Monday.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that GBP/USD extended last week’s rally, but overbought conditions should confine intraday moves to a 1.3490–1.3535 band.
USD/CHF extends its gains for the second successive day, trading around 0.8110 during the early European hours on Tuesday. The currency pair has pushed higher as the US Dollar (USD) erased its intraday losses, fueled by a sharp rally in crude oil driven by heightened geopolitical tensions.
OCBC’s Sim Moh Siong and Christopher Wong highlight that Japan’s recent FX intervention, backed by United States (US) involvement, has not fully reversed Japanese Yen (JPY) weakness, with USD/JPY near 159 after retracing much of its post-intervention drop.
ING analysts Warren Patterson and Ewa Manthey note that Oil prices are firmer as optimism over a potential US–Iran deal fades, keeping supply risks elevated.
West Texas Intermediate (WTI), futures on NYMEX, trade 1.55% higher at around $82.70 during the European trading session on Tuesday, the highest level seen in over a week.
The GBP/USD pair seesaws between tepid gains and minor losses through the early European session on Tuesday, though it remains close to the highest level since July 16 set the previous day.
The Euro (EUR) nudges lower against the US Dollar (USD) on Tuesday, weighed by the stalemate in the US-Iran negotiations and higher oil prices, which put additional pressure on the crude-importing eurozone economies.
Here is what you need to know on Tuesday, August 11:
The Indian Rupee (INR) opens on a cautious note against the US Dollar (USD) on Tuesday. The USD/INR pair rises further to near 95.40 as surging oil prices due to escalating fears of a prolonged global supply disruption have weakened the Indian currency.
Gold (XAU/USD) extends its intraday retracement slide from the highest level since June 5 and drops to a fresh daily low, near the $4,350 area during the first half of the European session on Tuesday.
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