Aussie stays steady tight range after RBA released minutes for its June 2 meeting. The central bank noted that it was "appropriate" to keep rates unchanged at historical low of 2.00% in June and to "assess information on economic and financial conditions as it become available". It said that "these data would inform the board's assessment of the state of the economy and the outlook and hence whether the current stance of policy would most effectively foster sustainable growth and inflation." Meanwhile, it also acknowledged that "the available data suggested that private business investment had declined further in the March quarter." Regarding the exchange rate, RBA said "a lower exchange rate would have an immediate beneficial effect on some sectors, such as tourism." And, "it would need to be lower for a sustained period to have a significant effect on large investment decisions in other trade-exposed sectors."
In Japan, BoJ governor Haruhiko Kuroda said that his comment last week wasn't aimed at influencing the exchange rate. He said last week that yen was "unlikely to weaken further in real effective terms." Meanwhile, he said that real effective rate is a measure of trade weighed, inflation-adjusted value rather than an indicator of bilateral exchange rate. He emphasized that "as long as exchange rates move stably in a way reflecting economic fundamentals, they won't do any harm to the economy." BoJ will announce policy decisions later in the week and markets generally expect the central bank to stand pat.
Euro remains in tight range today after the last-ditch talks between Greece and EU officials collapsed on Sunday. Greece will need to unlock a further EUR 7.2b in bailout fund and to repay EUR 1.6b to IMF by the end of June. EUR officials rejected Greece's latest proposal and said there was still a EUR 2b gap in terms of annual permanent budget savings. Meanwhile, Greece remained insistent on avoiding further pension cuts and tax hike. IMF, who walked out of the talk last week, is trying to bring back Greece and EU together. Its chief economic Olivier Blanchard Brussels should be be prepared to delay more Greek debt repayments, accept limited reforms and cut interest rates. Meanwhile, Blanchard said Greece should offer further pension reforms and drop some VAT exemptions. Eurozone finance ministers will meet on the issue this Thursday.
On the data front, UK will release CPI and PPI today. Eurozone will release German CPI final and employment but main focus will be on German ZEW. US will release housing starts and building permits. But Canada will release international securities transactions.