Aussie Recover in Asia after Reserve Bank of Australia Minutes of Meeting

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On Tuesday, the Aussie recovered in Asia after remarks from the central bank chief and the  release of the minutes from the October review said that updated predictions on jobs and inflation will aid any policy decisions in the upcoming board review, noting upbeat mining data.

AUD/USD traded at 0.7664, up 0.45 percent, although USD/JPY adjusted at 103.85, down 0.05%. GBP/USD  presented strength in Asia, trading up 0.50% to 1.2245. Also of note were statements from Fed Vice Chair Stanley Fischer stating  the central bank is “very close” to job and price goals that should generate a rate hike.

Previously, Reserve Bank of Australia Governor Philip Lowe said Tuesday 3rd quarter inflation figures will be an essential  indication of inflation expectations, which have clearly dropped recently and there is a need to guard against them declining more.

“Of course, one of the key influences on inflation expectations is the actual outcomes for inflation. We will get an important update next week with the release of the September quarter CPI,” Lowe said at a conference in Sydney. CPI data are due Oct. 26.

Somewhere else, 3rd quarter consumer prices increase 0.2% QoQ in New Zealand, more than the flat result seen, while the YoY pace presented a 0.2% increase, higher than the 0.1% seen. NZD/USD traded at 0.7179, up 0.60%, after the data. Last week, RBNZ Assistant Gov. John McDermott  stated the bank expected this quarterly CPI to show inflation bottoming out and it would increase from here. The RBNZ will next review the official cash rate Nov. 10 and expectations are for a 25 basis points reduction to 1.75%.

The U.S. dollar index, which gauges the greenback’s strong point against a trade-influenced basket of six major currencies, drop 0.20% to 97.66.

Suddenly, on Monday,  the greenback stayed lower against the other major currencies, after the release of downbeat economic reports from the U.S. diminished optimism over the strength of the economy, although the dollar still stayed within close distance of a seven month high.

The Federal Reserve of New York stated its Empire State manufacturing index  drop to -6.80 in October from -1.99 the prior month. Analysts had anticipated the index to increase to 1.00 this month.

Another report presented that U.S. industrial output  increased by 0.1% the previous month, below expectations for an increase of 0.2%.

However, manufacturing production surge by 0.2% the previous month, compared to predictions for a 0.1% increase.

Earlier Monday, final data presented that the euro zone consumer price index increased 0.4% in September, corresponding to expectations. Year-on-year, consumer prices increased 0.4% the previous month.

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