Daily FX Trading Update: RBA Decision Coming Up

The US dollar barely made any headway on Monday as US traders were off enjoying the Labor Day holiday. The ISM non-manufacturing PMI is due today and a drop from 55.5 to 55.4 is expected, likely reflecting a slowdown in the jobs component as well. The US labor market conditions index is also lined up.
The euro was mostly weaker against its peers as traders seem to be positioning for a dovish ECB statement. Final services PMI readings from its top economies and the region’s Sentix investor confidence index were in line with expectations. German factory orders, euro zone retail PMI and revised GDP figures are due today.
The pound was able to score some gains after the UK services PMI also beat expectations, following impressive readings from the manufacturing and construction sectors last week. The services PMI jumped from 47.4 to 52.9 as the weak pound attracted more tourists, which supports service sector activity. There are no major reports due from the UK today.
The franc held its ground as there were no major market catalysts affecting market sentiment on Monday. SNB head Thomas Jordan has a speech lined up today and any remarks against franc strength could spur a selloff. Also lined up is the Swiss CPI which might show a 0.1% drop in price levels, slower than the earlier 0.4% decline.
The yen gave up a bit of ground against its peers as BOJ Governor Kuroda simply reiterated his previous dovish remarks and didn’t provide more details on additional stimulus. Japan’s average cash earnings also beat expectations, putting upside pressure on spending and inflation. Still, the yen resumed its slide in the Asian session as traders tried to sell the currency at better levels.
Commodity Currencies (AUD, NZD, CAD)
The comdolls were able to score some gains as risk appetite appeared to improve ahead of the joint statement from Saudi Arabia and Russia. However, the countries simply announced that they agreed to form a working group to assess oil market movements, leading many to think that the OPEC informal meeting might be a dud as well. The RBA is set to make its policy statement today while New Zealand will have its dairy auction in the late US session.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.