AUD/USD lower after China rate cuts, RBA minutes

The China rate cut news is here:

• PBOC Loan Prime Rates (LPR) CUT: 1-year 3.55% (prior 3.65%) & 5 year 4.20% (prior 4.30%)

And a lower yuan at the reference rate setting:

• PBOC sets USD/ CNY central rate at 7.1596 (vs. estimate at 7.1630)

And the Reserve Bank of Australia minutes:

• RBA June minutes: Wage rises higher than expected

The combined impact has been a drop lower for AUD/USD. On China, the rate cut today would appear to be the last of the expected stimulus moves. While some fiscal/regulatory stimulus is expected still, there are doubts about how large this might be:

• More from Goldman Sachs - reasons for slashing their China growth forecast

• ICYMI - Nomura slashes its forecast for China's 2023 GDP growth to 5.1% from 5.5%
• UBS revised down its China 2023 GDP growth forecast to 5.2%, from 5.7% previously

And while the Reserve Bank of Australia did hike rates in June the minutes reveal a still complacent central bank that may well dodge a July hike. I think they will hike, on balance, but sheesh, these guys are very relaxed in the face of persistent high inflation. Last week we had very, very solid labour market data also.

AUD/USD: