Euro hits lows on German data miss


Retail sales fail to rebound

German retail sales failed to match expectations of a 0.5% rebound on a month-by-month basis in May and instead declined for the third month in a row. Sales fell 0.6% m/m, below forecasts of a 0.5% rebound but were still better than April’s 2.0% drop. EUR/USD slid to the lowest level since June 20 but has since rebounded to 1.1291.


RBA cuts as expected

The Reserve Bank of Australia cut its benchmark rate by 25bps for the second consecutive meeting today, confirming expectations of the majority of analysts. The central bank stated that the moved was intended to reduce unemployment and promote economic growth, while inflation remains in a benign environment. Having held rates unchanged for more than two years, and often hinting that the next move could be a hike, the RBA has cut rates to record levels for the past two meetings.

AUD/USD fell to an intraday low of 0.6958 in a knee-jerk reaction but failed to make it past yesterday’s 0.6956 low, and a technical rebound ensued. The RBA stated it “will continue to monitor developments in the labour market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time”. The FX pair is now at 0.6983, marginally higher than pre-decision.


AUD/USD Daily Chart

Source: OANDA fxTrade


Central Bank speakers on tap

Hot on the heels of the RBA’s rate cut, Governor Lowe is scheduled to speak at 0930GMT and is quickly followed by the Fed’s Williams at 1035GMT. On the data front, most releases are second tier, with the US Redbook index and Canada’s Markit manufacturing PMI the main events schgeduled. Bank of England’s Carney will round off today’s session.


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Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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