As the hype around US tax cuts continues to grow, forex markets made a slow start to the trading week. There weren’t too many fireworks, and perhaps some of the gains in the USD are already priced in. It certainly didn’t stop stocks rallying on the other hand as the SPX made more record highs.
In early Asian trade, our attention turns to the AUD/USD and the RBA minutes. The Australian economy is interestingly poised, in that there are a number of forces working against one another.
Who’s Winning the Race?
The economy is on the improve, however, it’s not improving at the same rate as our US counterparts. As such it’s unlikely that we will see the same level of interest rate increases and therefore the AUD/USD might decline going forward.
The RBA minutes will give us an insight into the outlook for jobs, housing and the overall level of inflation. Like I suggested yesterday, I’m looking to sell bounces. 0.7693 is the resistance level that I would like to be shorting if we get an upbeat outlook.