The market sentiment deteriorated amid increasing virus cases in the USA and Australia. Investors prefer safe-haven assets like gold, the US dollar and the Japanese yen.
Aussie rose on RBA meeting minutes
According to the minutes of the Reserve Bank of Australia’s July meeting, released today, the Australian economy was improving. The RBA members revised down the new estimate of "neutral" interest rates, or rates that are not tight or too loose to the economy, from around 5% to 3.5%. Westpac analysts say that this may be interpreted as laying the foundation for an increase in interest rates.
AUD/USD surged to 2-year high above 0.7900 on the news. On Monday, the Aussie was also cheered up by the robust economic growth figures in China: Chinese economy expanded at a faster-than-expected 6.9% pace in Q2 and is now expected to comfortably meet its 2017 growth target. Australia imports raw materials to China, so improvement in China’s economic outlook is positive for the AUD.
Analysts at UniCredit think that AUD/USD will rise to 0.8000 this quarter before rising to 0.8500 in 2018. In the short term, AUD/USD looks overbought. Support is at 0.7830 and 0.7780.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
Riskier currencies and stocks are in favor of investors. Surprisingly, gold rallies too. Let’s have a closer look.
Congratulations! Gold has just opened a new era... or, rather, reopened...
Canada will publish the employment change and the unemployment rate on July 10, at 15:30 MT time.