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USD Index Pauses Near-Term Downtrend

FOREX
  • The greenback trades in minor positive territory at the halfway point on Monday, with the USD Index pressing pause on its near-term downtrend.
  • AUD is the weakest in G10, reversing some of last week's strength ahead of the Tuesday RBA rate decision. Markets remain cautious over RBA policy given the recent rollout of strict lockdowns across a number of the largest states. Markets are split over whether the Bank will proceed with taper plans after governor Lowe flagged that government policy, not central bank policy, should take the load going forward.
  • Datapoints are few and far between Monday, with market activity and volumes expected to wane headed into the NY crossover. Labor Day should keep activity muted, with US exchanges seeing an early close.
  • Newly minted BoE MPC member Mann speaks on inflation, although the bulk of her comments have already been seen, with little policy relevance for the Bank.

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