USD Trading Outlook (07-05-2014)

The Australian Dollar (AUD): Europe ran stops above 0.9315 just before NY walked in. Broad based USD pressure and the basically unchanged RBA statement gave bulls courage to push the pair towards 0.9340 into NY’s open. The USD found little relief from bears for most of NY and AUD/USD rallied to a 0.9367 high. Persistent downward pressure on the US 10-year yield kept the greenback on its heels. AUD/USD saw only a minor pullback and sat just above 0.9360 late in the session. Markets look to Oz Q1 retail sales & China’s April HSBC Services PMI. Oz sales are f/c to improve to 0.4% vs the prior 0.19% while the mkt looks to see if China’s services can hold ground near March’s 51.9 result. Sold results could see AUD/USD’s recent rally push further.