Forex – Aussie drifts weaker in Asia after RBA minutes housing concerns: INV

The Aussie held weaker in Asia on Tuesday after central bank minutes of the June meeting that showed some risk scope on housing, but otherwise lauded the economy.

Also in Australia house prices came in as expected for the first quarter at again of 2.2%.

AUD/USD traded at 0.7588, down 0.14%, while USD/JPY changed hands at 111.68, up 0.13%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.03% to 97.20.

Overnight, the dollar rose to session highs against a basket of global currencies, after a top Federal Reserve official stoked expectations of an additional rate hike this year, saying that rising wages would help lift inflation closer to the central bank’s target.

On Monday, New York Fed President William Dudley said that halting interest rate increases could be dangerous for the economy, adding that continued progress in the jobs market will push wages higher, reviving the recent slowdown in inflation.

“Inflation is a little lower than what we would like, but we think that if the labor market continues to tighten, wages will gradually pick up and with that, inflation will gradually get back to 2 percent,” Dudley told a local business group in Plattsburg, New York.

Dudley’s comments echoed that of other senior central bankers who worry that delays in monetary policy tightening could result in a situation in which the Fed could be forced to raise rate rapidly.

The Fed, as was widely expected, raised its key bench mark rate by 0.25% to between 1-1.25% last Wednesday, hinting at another rate increase later this year.

The rise in the dollar pegged back the euro and the pound as Dudley’s upbeat comments come amid the official start of Brexit negotiations between the UK and the EU.

In a joint press conference alongside EU chief negotiator Michel Barnier, UK Brexit Secretary David Davis, said negotiations got off to a “promising start.”

The dollar continued to straighten against the yen as investors continued to flee safe-haven yen in the wake of the Bank of Japan’s reluctance to taper emergency stimulus for the economy.

Source: Investing.com

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