It was RBA meeting day today … and it seemed like the whole FX market took a day off in respect. 0330GMT finally rolled around and the RBA delivered, cutting its Cash Target Rate by 25bp to 3.00%. The AUD immediately rallied 25 points, squeezing out some poorly located shorts; NZD, EUR and GBP all jumped, to a lesser extent, simultaneously.

Data releases:

  • Japan Nov. Monetary Base +5% yoy (vs 10.8% prior)
  • NZ Nov. ANZ Commodity Price Index +1% mom (vs. +1.3% prior) – 4th consecutive rise
  • UK Nov. BRC Retail Sales Index +0.4% mom (vs. -0.1% prior)
  • Australia Oct Building Approvals down 7.6% mom (vs. -1.6% expected), +14.5% yoy (vs. +20.2% expected)
  • Australia Q3 Current Account deficit of 14.9 B (vs -14.55B expected)
  • RBA rate cut to 3% brings the cash rate back to a 3-year low and to a level it was for the GFC
  • Comments from Australian Treasurer Swan after the rate cut
  • Link to full text of RBA’s Steven’s Statement & summary

EUR/USD had a quiet, range bound day absent any news/comments/data of note: 1.3046/64. It found some strength in the afternoon once the RBA rate cut was announced, along with the NZD (82.02/33 on the day) & Cable (1.6087/1.6103).

USD/JPY traded heavily for most of the session, in a limited range (82.04/29), with buyers ahead of the overnight lows. While the lows held, the highs got lower (within that very tight range) through the day. Hard to read too much into such a tight range, though.