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Forex - Australian dollar trends down ahead of RBA June minutes

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Investing.com -

Investing.com - The Australian dollar trended lower on Tuesday ahead of the release of the minutes fromt he June central bank board meeting expected to shed further light on its views as the economy transitions away from resources-led investment.

The Reserve Bank of Australia board meeting minutes for June are due at 1130 Sydney time (0130 GMT). The meeting took place a day before the release of first quarter GDP data.

AUD/USD traded at 0.9396, down 0.04%, ahead of the minutes.

Then comes China's actual FDI data at 1000 (0200 GMT). FDI was up 5.0% year-on-year in April. The Aussie could move on the data as China is a top export destination for products such as iron ore.

Overnight, the dollar traded largely lower against most major currencies due to uncertainty the effects the Iraq insurgency will have on U.S. recovery, while an International Monetary Fund decision to trim its U.S. 2014 growth rate weakened the greenback as well.

In Asia, USD/JPY traded flat at 101.84.

Concerns over the ongoing Sunni insurgency in Iraq continued to weigh on the dollar Monday by stoking fears that the escalating conflict could dampen global recovery, especially if the violence disrupts Iraqi oil exports, hikes prices at U.S. gasoline pumps and waters down the economy.

Elsewhere, news that the International Monetary Fund trimmed its 2014 U.S. economic growth forecast due to a harsh winter and a "still-struggling housing market" softened the greenback as well.

The IMF said it now expects the U.S. economy to expand 2% in 2014, down from its forecast of 2.8% in April.

Positive U.S. data meanwhile did little to boost the greenback.

The Federal Reserve Bank of New York reported earlier that its general business conditions index increased to 19.28 this month from 19.01 in May. Analysts had expected the index to decline to 15.0.

A separate report showed that U.S. industrial production rose by 0.6% last month, beating forecasts for a 0.5% gain.

Meanwhile across the Atlantic, Eurostat reported earlier that the euro zone's consumer price index rose 0.5% last month, in line with expectations and unchanged from a preliminary estimate. Euro zone inflation rose by 0.7% in April.

Still, the rate remains firmly below the European Central Bank's target of near but just below 2%, which capped the single currency's advance.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.01% at 80.54.

On Tuesday, the U.S. is to produce data on housing starts, building permits and consumer prices, while investors will be eager for Wednesday's statement from the Federal Reserve on interest rates and monetary policy.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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