Glenn Stevens resisted any urge to go out with a bang or reduce his mortgage payments before he left office. Leaving the cash rate at the record low of 1.5%, the statement saw no major changes and the markets will now look to the US for further direction.
The Aussie had already travelled its typical daily range prior to the release according to 10 and 60 day ATR (average-true range). It had already had a pretty decent run following current account data, gaining 1% against the yen and 0.8% against the USD. Initial reactions from the dollar suggest the upside could be done for the session – there’s no compelling reason to buy, but even less to sell. It should remain supported but we see no argument for a roll-over.
ISM manufacturing data took a surprise contraction last week – tonight’s non-manufacturing (service) could confirm or deny the gloom to suggest broad economic weakness ahead. This may sway the Fed, or at least traders' interpretation of how the Fed will react in their next meeting to send the Aussie higher overnight.