RBA (read from the bottom up for the chronology):
- RBA June meeting minutes says further rate hikes will be needed
- More from RBA Gov Lowe - waters down market expectations of 4% cash rate by year end
- RBA Gov. Lowe says will discuss 25bp or 50bp interest rate hike at July meeting (July 5)
- RBA Gov Lowe - says interest rates are very low
- RBA says yield target was successfully used (but there is a but)
Other:
- Federal Reserve speakers on the docket for Tuesday
- ICYMI: Nomura forecasts an extended US recession beginning this year
- More from the Bank of Korea Governor: will act in the FX market if herd-like behavior seen
- PBOC sets USD/ CNY reference rate for today at 6.6851 (vs. estimate at 6.6810)
- South Korea central bank head says monetary policy should focus on lowering inflation
- AUD/USD (higher) update after RBA Gov Lowe speech
- NZD traders - heads up for the GDT dairy auction coming up Tuesday 21 June 2022
- South Korean exports +11% y/y (first 20 days of June)
- Australia data - weekly consumer confidence +1.6% after the -7.6% prior week
- ICYMI: Around a third of Chinese fuel-processing refining capacity is currently idle
- HKMA has intervened in the FX market
- 3 events coming from the Reserve Bank of Australia on Tuesday, 21 June (1st at 2200 GMT)
- New Zealand Q2 consumer confidence falls to 78.7 from 92.1 in Q1
- Trade ideas thread - Tuesday, 21 June 2022
- Forexlive Americas FX news wrap: Holiday trading during the US session
The focus of the early part of the session was on the Australian dollar, Reserve Bank of Australia Governor Lowe speaking, and then the minutes of the RBA June meeting.
This is how it played out (there’s a “but” at the end):
- AUD/USD inched a little higher on approach to Lowe speaking. Sure enough, Lowe delivered an expected hawkish message, reinforcing that further rate hikes are ahead. AUD/USD did have a sharp dip during Lowe’s Q&A session when he pushed back on market pricing of a 4% cash rate by year-end. AUD/USD soon recovered though but found its (brief) excursion above 0.6980 a step too far. On the releases of the minutes (June meeting) AUD dropped back a little again. There were a few further messages in the minutes that rate hikes would not be getting near a 4% rate by the end of this year. The minutes were not dovish though, just further push back.
- Since then AUD/USD has straddled 0.6970 and thereabouts.
- The “but” to all this is that while AUD was higher, so was EUR, GBP, NZD, and especially CAD against the US dollar. So, some USD weakness played a role also.
On CAD, it caught a bit of a tailwind from oil prices ticking higher during the session.
USD/JPY and USD/CHF are little net changed here in Asia-Pacific.
AUD/USD, the sharp dip on Lowe’s remarks about the unlikelihood of a 4% cash rate in 2022 is marked with an arrow:
