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Forex - Australian dollar flat ahead of RBA May minutes

Published 05/19/2014, 07:23 PM
Updated 05/19/2014, 07:25 PM
Aud flat in early Asia
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Investing.com - The Australian dollar was flat Tuesday ahead of minutes from the May meeting of the central bank board with the Japanese yen also holding steady in a light data day in Asia.

AUD/USD traded at 0.9330, down 0.01%, while USD/JPY held flat at 101.49.

The Reserve Bank of Australia releases its May board meeting minutes at 1130 Sydney time (0130 GMT), though marrket watchers say that the comments have been overtaken by a detailed Statement of Monetary Policy released three days after the meeting.

RBA Assistant Governor Guy Debelle is due to give a speech at a Financial Services luncheon in Adelaide at 1230 (0230 GMT).

Overnight, the dollar edged lower against most major currencies as investors digested last week's mixed bag of economic indicators and ahead of the Federal Reserve's April policy meeting minutes on Wednesday.

The preliminary Thomson Reuters/University of Michigan consumer sentiment index fell to 81.8 in May from 84.1 in April, confounding market expectations for a 84.5 reading, which softened the dollar.

On the flip side, the Census Bureau reported that U.S. building permits rose 8% to 1.080 million units last month, up from an upwardly revised 1.000 million in March. Analysts were expecting building permits to rise to 1.010 million units in April.

The Federal Reserve will release the minutes of its latest policy meeting on Wednesday, and investors opted for safe-haven yen positions ahead of time, which weakened the dollar and gave the single currency room to rise.

Geopolitical concerns also softened the dollar by stoking concerns the U.S. may become deeper involved in the Ukraine crisis and risk seeing recovery suffer as a result.

Ukrainian forces and pro-Russian separatists in the eastern reaches of the country continued to clash on Monday, resulting in the death of one Ukrainian soldier.

Ukraine will hold elections on May 25, and concerns persist that Russia will meddle in the voting and escalate the crisis.

Elsewhere, tensions in Libya flared after gunmen stormed parliament on Sunday in some of the worst violence the country has seen since the 2011 war that ousted Muammar Qaddafi.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.06% at 80.08.

On Tuesday, Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.

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