Forex Daily Recap – RBA Cuts Interest Rate by 25 bps

AUD/USD

The Aussie pair remained seesawed throughout the day in the middle of RBA rate cuts. Australian economists and market experts had already expected a reduction in the interest rates this time. The policymakers declared a 25 bps rate cut marking the new interest rate near 1.25% over previous 1.50%. The Bank has performed a rate cut for the first time in the last three years. Following the RBA rate statement, the AUD/USD pair made a sudden jump of 0.30%, reaching near 0.6993 levels. However, the spike vanished within seconds and dropped back to 0.6965 levels. Also, earlier the day, Australian April MoM Retail Sales reported -0.1% over 0.2% estimates. Later the day, RBA Governor Philip Lowe mentioned that rate cut was to support the employment growth and maintain the desired inflation target. The Board also said that it would continue to monitor the developments in the labor market and adjust the monetary policy accordingly.

EUR/USD

After rallying at the top speed last day, the Euro pair had managed to reach 1.1260 levels. Today, the EUR/USD pair upshot in the early hours after the release of positive Spain and Italy Unemployment figures. The Spain May Unemployment Change reported -84.1K over -67.0K forecasts. Also, the Italy April Unemployment figures came out 0.1% lower than the market expectation of 10.3%. Following such positive reports, the pair soared and reached near 1.1276 levels.

Though the Job-related figures recorded some pleasing data elevating the pair, adverse Eurozone CPI ate away the accumulated gains. The European Monetary Union (EMU) reported the May Consumer Price Index (CPI) 0.1% lower than the 1.3% estimates. Also, the EMU CPI Core data came out as 0.8% over 0.9% forecasts.

USD Index

The fall in the Greenback appeared to pause after rebounding from the 97.00 bottom levels. USD Index made the opening on Tuesday morning near 97.20 levels and was trading near the same mark at around 17:13 GMT. The Buck touched the lowest point after positive Unemployment Eurozone data pushed the major rival EUR/USD pair upwards. Today, Fed Chair Powell responded to the market recession fears, addressing over chances of a rate cut. Powell said that the Bank would take appropriate steps to sustain economic expansion. The Central Bank Chairman mentioned that the Bank would closely monitor the trade issues, maintaining the 2% inflation target. Meanwhile, the US April MoM Factory Orders data reported -0.8% in comparison to the -0.9% consensus estimates.

USD/CAD

By day end, the Loonie pair continued to move in correlation with Greenback’s downward movement. The USD/CAD pair had remained consolidated near 1.3440 levels in the Asian session. The pair kept attempting to jump but failed to do so and remained capped under 1.3448 levels.

Meantime, the Crude Oil WTI Future was trading lower throughout the day, marking the day’s low near $52.44 bbl. The Commodity’s price kept plunging amid escalating trade tensions and Russia’s disagreement with the OPEC group. Russia remains stubborn over not extending the supply cuts beyond the end of June.