April 20, 2010
After gapping lower over the weekend, the Aussie continued to struggle against the greenback and the yen in yesterday's trading. The absence of risk appetite, along with China's decision to implement tightening policies, dragged the Aussie down.
Australia didn't release any economic reports yesterday as news from China, its main trade partner, became the key driver of the Aussie's movement. China announced that it would be adopting credit restrictions in order to control the rapid appreciation of property prices. This suggests that China is already taking some steps to put a lid on its excessively strong economic expansion. These tightening measures could then have a negative impact on its export partners like Australia.
The RBA is set to release the minutes of their latest monetary policy meeting at 1:30 am GMT today. These minutes should explain the basis for the RBA's fifth rate hike, which took the markets by surprise. Would they pause from their rate hikes next time or should we expect a sixth hike? Comments from RBA officials could also provide some hints on that.
"The only cable I watch is the pound baby."