The Loonie fell the most against the U.S dollar as oil prices fell below $70, and the release of GDP showed a contraction of 3.4% in the economy for Q2 2009 sending the USD/CAD to 1.1090 high. The Euro was strong considering the risk aversion which was controlling the markets, rising to 1.4367 against the Dollar. The U.S. positive data helped in lifting the Euro as Chicago PMI rose more than expected to 50.0 in August. Sterling gained modestly as a Home track report showed UK home prices rose for the first time since 2007, but remained trading in a range.
The RBA today left the cash rate unchanged at 3.0%, as was universally widely expected. The tone of the accompanying statement was largely unchanged (optimistic) without signaling an impending rise. The overall cautious tone was not what the AUD bulls were looking for and AUD came under selling pressure. In the short term we expect AUD weakness on tempered interest rate expectations, Chinas moderating growth, and tomorrow GDP figures.
Today Germany the biggest economy in the Euro Zone will release its unemployment data which is forecasted to come out at 8.4% in Aug a 0.1% increase than a month earlier. The Euro Zone will also be releasing its unemployment rate, expected to rise to 9.5% in July from 9.4% in June. From US, ISM Manufacturing Index is expected to have a reading above 50, and pending home sales are expected to rise by 1.6%.