Market Summary for 18/8/2015

Aug 19, 2015
RBA meeting minutes revealed little new, reiterating its previous less dovish stance that the Aussie dollar was adjusting to lower commodity prices and that the US dollar could appreciate further against the Aussie, leading to a short term rally in the Aussie that quickly fizzled. Later in the day, the Australian dollar was sold off following another steep fall in Chinese and Hong Kong equity markets, falling to 0.733 against the greenback. On the other hand, Sterling rallied sharply from its day low of 1.566 to breach 1.57 after stronger than expected CPI figures, but was unable to maintain itself above 1.57. US and European stocks steadied following the rout in Asia, maintaining their ground while trading in a tight range. Euro broke its 1.105 support early in the US session and closed lower, around 1.103. 

Key risk events today: US CPI, FOMC July meeting minutes
Aud and Eur are settling near their respective lows, but seem to be unable to push lower for the time being, which could see a retracement of sorts. Aussie in particular should be quite dependent on how China trades today after yesterday's falls. Tonight is expected to be quite critical, with US CPI figures and Fed July meeting minutes. While the fed minutes will probably not give any clear indication of the possibility of a September liftoff, US CPI figures should be more indicative.