After several of the ‘FAANGs’ made fresh record highs to kick off the week, so the risk pendulum has swung back again with US stocks opening softer on the day so far. The call for a ‘healthy’ bull market in China was heeded in Shanghai as stocks eked out a small gain and much attention now focuses on the yuan’s appreciation and the authority’s tolerance for a stronger currency.

Volatility remains subdued across the G10 FX space with the dollar trading higher against its peers. Is this a classic ‘turnaround Tuesday’ move which bucks the trend just a single day? The taps for global monetary and fiscal policy are fully open so they should backstop risk assets and see the dollar soften in the week ahead.

As expected, the RBA kept its cash rate and 3-year yield target unchanged at 0.25% and stressed it will not raise rates until CPI is sustainably in target and there is progress to full employment.  

AUD/USD closing in on 0.70

The Aussie is clawing gains back after an initial sell-off during this morning’s RBA meeting. There was no mention of the currency in the policy statement, but the sense of caution was evident by the use of less supportive language.

The flare-up in cases in Australia is adding to that concern so any break above the cycle high at 0.7064 may be tough to sustain. That said, the June consolidation just below this high would generally mean prices should advance higher in line with the dominant trend. Support is at the lower end of the recent range around 0.68.

GBP/USD breaks above 1.2550

Markets are turning their attention to Chancellor Sunak’s summer economic update tomorrow where he is expected to announce additional and continued support for the jobs market. A variety of measures have been proposed so the devil will be in the detail.

Resistance around the 1.25 level has been broken today with prices also pushing up through the 21-day moving average.  The next upside targets will be the April highs around 1.2645, with support at 1.2437.

دست برداری: اس آرٹیکل کا مواد ذاتی آراء پر مبنی ہے اور اسے ذاتی اور/یا کسی اور سرمایہ کاری کا مشورہ اور/یا پیش کش اور/یا فنانشیل آلات میں کسی بھی قسم کی لین دین کرنے کی ترغیب اور/یا ضمانت اور/یا مستقبل کی پرفارمنس کی پیش گوئی سمجھ لینا درست نہیں۔ ForexTime (FXTM)، اس کے ملحقین، ایجنٹس، منتظم، افسران یا ملازمین کسی بھی معلومات یا دستیاب ڈیٹا کی درستگی، استحکام، موزونیت یا جامعیت کی ضمانت نہیں لیتے اور نہ ہی اس حوالے سے کی گئی کسی سرمایہ کاری کے نتیجے میں ہونے والے ممکنہ نقصانات کے لیے ذمہ دار ٹھہرائے جا سکتے ہیں۔