The AUDUSD opens at 0.6849 and the NZDUSD opens at 0.6493 this morning.
The Aussie Dollar is not looking great, and has actually broken down to its lowest levels since the January flash crash. The Kiwi is also delicately poised close to the lows. We have the Fed meeting early Thursday morning, and usually one would imagine there would not be a significant break lower before that, hence it is slightly surprising that the AUD is actually so weak going into it.
Speaking of the Fed meeting, the market is widely expecting a dovish hold. Given that the market is starting to price in 2-3 cuts this year out of the States, anything that is not dovish should see a jump in the USD. The odds of them actually cutting on Thursday have been small, albeit they are rising. The chances of a cut currently sit at 17%. The higher this chance gets, the more volatility we can expect either way Thursday morning.
Out of Australia at 11:30 we have the Monetary Policy Meeting Minutes. Generally this is something you need a coffee for, but this one will be a lot more closely scrutinised than others. When the RBA last cut a few weeks ago, they were not nearly as dovish as the market was expecting, leading to AUD strength. If that train of thought is reinforced in the minutes today, it could be enough to snap the Aussie off its lows. For now at least.
Global equity markets are generally flat on the day - Dow +0.1%, S&P 500 0.0%, FTSE 0.2%, DAX -0.1%, CAC 0.4%, Nikkei +0.0%, Shanghai +0.2%.
Gold prices are flat at USD$1,342 an ounce. WTI Crude Oil prices gained 0.4% to US$51.8 per barrel.
Upcoming Data Releases
AU Monetary Policy Meeting Minutes - 11:30 AEST / 13:30 NZST
ECB President Draghi - 18:00 AEST / 20:00 NZST
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