After testing 0.7660 resistance level in early trade, AUDUSD traded lower later in the Asian session Tuesday on weakening Business confidence and forecast of more aggressive RBA cuts from one of the big four banks. NAB now expect 2 rats cuts in 2017 bringing the RBA Cash Rate to 1.0% with the chance of further unconventional measures. Inspired by better-than-expected Chinese data, AUD buyers bought the dip once again, printing the fresh three-months high 0.7680 later in the US session. China’s CPI in July beat the expectation 1.7%, reporting at 1.8%. PPI reflected a better economic picture as well, -1.7%, compared to -2.0% expected, showing a slowdown of economic downturn. This report mitigates investors’ worries about China’s hard landing. Today, trader’s attention will return to RBA governor Stevens’ final speech before he retires. The RBNZ cash rate decision on tomorrow is the biggest event in APAC this week and widely expected at a 0.25% cut to 2.0% with a small chance of an aggressive 0.5% rate cut.
BoE MPC member McCafferty’s dovish comments pushed Cable below 1.30 in early Asian trade and poor data reaffirmed its weakness through London dealing. After slumping to new 4-weeks low at 1.2960 in the early session, Cable has rebounded to 1.30 mark during New York trade. McCafferty claimed that there will be more easing if the UK economy deteriorated further, including more QE and cutting rates close to zero. UK Industrial production met expectation of 0.1% increase, giving support to the GBP in the late session to reclaim $1.30. However, the manufacturing production reflected UK economy slowdown, reported at -0.3%, inferior than 0.0% expected. The UK Trade deficit in June extended to £12.4 billion, a widening of £11.5 billion from May.
