The Australian dollar lost strength against all its rival after after central bank board meeting minutes for June released on Tuesday took a more dovish view of the economy and inbound investment into China unexpectedly slumped in May. The RBA tweaked its language to highlight uncertainties which “were likely to take some time to resolve.” It is “difficult to judge the extent to which this (low interest rates) would offset the expected substantial decline in mining investment and the effect of planned fiscal consolidation.”
Elsewhere, the dollar gained strength on Tuesday after U.S. inflation rates beat market expectations. The Labor Department reported earlier that the U.S. consumer price index rose 2.1% on year in May and rose 0.4% from April. Consumer prices rose at their fastest pace since October 2008, which sparked demand for the greenback.
Hence we are seeing a weak Australian dollar and a mildly strong US dollar. Intra-day bias remains on the downside as 21 and 55 EMA is seen to be crossing downward on the 1 hour time-frame. Also SSRC and MACD oscillator signals bearish continuation should be seen. More supply to 0.92837 is expected.
Later in the day, investors will be watching closely the FOMC economic projections which will determine whether strength or weakness would be seen in the greenback.