Risk-off keeps Investors away from the Greenback

Daily Update - 4th December 2019

Yesterday’s Market

• AUD: RBA Interest Rate Decision

Yesterday’s Explained

The Reserve Bank of Australia kept interest rate unchanged at 0.75%.  No changes to monetary policy, focus on growth. It noted in the statement that given “the long and variable lags in the transmission of monetary policy”, the central bank was on hold to monitor developments, “including in the labour market”. Though, it reiterated that due to both global and domestic factors, ” it was reasonable to expect that an extended period of low interest rates will be required”. RBA is also “prepared to ease monetary policy further” if needed.

 

Today’s Market

• USD: ISM Non-Manufacturing PMI

• CAD: BoC Interest Rate Decision

Today’s Focus

The ISM Non-Manufacturing Index released by the Institute for Supply Management (ISM) shows business conditions in the US non-manufacturing sector. It is worth noting that the non-manufacturing sector does not influence, either positively or negatively, the GDP as much as the ISM Manufacturing does. A result above 50 is positive (or bullish) for the USD.

BoC Interest Rate Decision is announced by the Bank of Canada. If the BoC is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the CAD. Likewise, if the BoC has a dovish view on the Canadian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.