Following on from a strong performance in local and Asian equities, US equities continued solid gains for the second consecutive session with the S&P 500 rising over 2 percent on the day. This proved to be the perfect platform for the Aussie dollar to regain more ground after last week's slump which saw the local unit fall bellow US dollar parity. Commodity, metal and energy markets also recorded solid gains helping the AUDUSD pair grind higher for the majority of US trade. The value proved to be in the AUDCHF which is currently up 2.4 percent since Monday's open on reports that Swiss authorities may be working to establish a floor for EURCHF price action or even make steps to establish a Euro-Swiss peg has seen broad based franc loses against major counterparts. The local unit also outperformed its commodity bloc rivals well and truly gaining the upper hand against the kiwi with more moderate gains against the CAD.
The day ahead will see the focus turn to the release of the minutes for the RBA's policy meeting held earlier this month. Despite concerns about the medium-term outlook for inflation, the ensuing statement showed the central bank considered it "prudent" to keep rates on hold at 4.75 percent citing an "acute sense of uncertainty in global financial markets."
Should the finer points of today's minutes resemble more of a bearish tone, we expect the local unit to remain supported above 104.4/5 US cents. In many ways the minutes can be seen as a tad stale in the eyes of investors, considering the vast amount of market moving themes impacting global markets since the meeting. Nevertheless, we expect any weakness to be short lived with price action likely to continue to forge higher through 105 US cents this week. At the time of writing the Aussie dollar is buying 104.9 US cents.