AUD the Main G10 Winner, BoC Decides on Monetary Policy

USD Continues to Tumble, AUD Shines

The US dollar continued trading lower against all but two of the other G10 currencies on Tuesday and during the Asian morning Wednesday. It underperformed the most versus AUD, NZD, and NOK in that order, while it eked out some gains only versus JPY. The greenback was found virtually unchanged against CHF.

AUD/USD — Technical Outlook

Over the past couple of days, AUD/USD has accelerated sharply to the upside. The pair continues to trade above a short-term tentative upside support line taken from the low of May 15 th, however, the rate has distanced itself quite a bit from that line. Although we may see a small correction lower, still, if the buyers are feeling a bit more comfortable, the pair may get pushed further north.

S&P 500 — Technical Outlook

The S&P 500 continues to slowly grind higher, while balancing above a short-term tentative upside support line taken from the low of May 14 th. As long as that upside line stays intact, we will remain positive and aim for slightly higher areas.

Will the BoC Expand its QE Today?

Apart from developments surrounding the broader market sentiment, today, CAD-traders are also likely to pay attention to the BoC interest rate decision. When they last met, policymakers of this Bank kept interest rates unchanged at 0.25%, and announced an expansion of their QE purchases. A couple of weeks ago, inflation numbers for April missed estimates, with the headline rate falling to -0.2% yoy, while last week, GDP data showed that the economy contracted 8.2% qoq (annualized rate).

As for the Rest of Today’s Events

The final Markit services and composite PMIs for May from the UK, the Eurozone and the US are coming out, but as it is always the case, all the indices are expected to confirm their preliminary estimates.

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