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RBA Minutes Sap Some Strength From Aussie, Sterling Underperforms

FOREX

Price action across G10 FX space was relatively subdued in the lead up to Wednesday's FOMC decision. AUD went offered, extending losses to fresh session lows after the minutes from the RBA's latest MonPol meeting noted that "wages growth would be unlikely to be consistent with the inflation target earlier than 2024" and warned against potential hiccups related to the imminent termination of the JobKeeper wage subsidy scheme.

  • Sterling lagged behind as more EU nations suspended vaccinations with the AstraZeneca jabs, while Brussels launched legal action against the UK over alleged breach of the Brexit deal.
  • USD/JPY struggled to advance towards the fresh cycle high printed on Monday, even as a "golden cross" formation materialised on the daily chart.
  • The PBOC fixed its USD/CNY mid-point at CNY6.5029, just 3 pips below sell side estimates.
  • Today's data docket features German ZEW Survey, final French & Italian CPIs as well as U.S. retail sales & industrial output. Riksbank's Ingves & Jansson take part in an open hearing, while ECB's Elderson holds a Q&A session.

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