EUR Near Parity Ahead Of ECB, Dovish Lowe Weighs On AUD

EUR/USD has not gotten much beyond a 20pip range today, holding between 0.9980/1.0000 for much of the session. All eyes shift to the ECB decision due later today, where a 75bps hike is expected. This is not a uniform expectation though, nor fully priced by the market, so if delivered could aid EUR/USD sentiment, particularly as the currency looks a little low relative to yield spreads.

• More action was evident in EUR/JPY. The pair got to fresh highs around 144.35, but we now sit back at 143.80, mainly due to some JPY stability.
• USD/JPY didn't see much headway beyond 144.50 earlier. Lower UST yields (10yr off to 3.23%), has likely helped. Dips sub 144.00 still appear to be supported.
• AUD/USD is down the most within the G10 space for the session, dipping to 0.6715, now back at 0.6730. The trade surplus was much lower than expected for July, as exports to China suffered.
• Then RBA Governor Lowe gave a dovish speech, stating the case can be made for slowing the pace of rate hikes. The governor stated Australia's lower wages backdrop may mean the RBA doesn't have to follow the experience of some offshore central banks in hiking rates aggressively.
• NZD (0.6045/50) has largely followed AUD's path. The AUD/NZD cross slightly lower at 1.1130.
• Dips sub 1.1500 in GBP have been supported, with UK fiscal plans the likely focus point today.
• ECB will then take centre stage. Scheduled Fedspeak is headlined by Chairman Powell, Chicago Fed Pres Evans (‘23 voter), and Minneapolis Fed Pres Kashkari (‘23 voter).