There could be some sideways action ahead of Thursday's Aussie jobs data.
AUD/USD is trading down 1.2% on the day despite a benign set of minutes of the Federal Open Market Committee policy decision that took place over the July 26-27 policy meeting. There was a knee-jerk reaction to the minutes that took the value of thelower but the dip was bought back shortly afterwards resulting in a turnover in the commodity-fx arena.
''This suggested to investors that the pace of rate hikes should slow, which pushed the pricing for a 75bp hike in September from 58% prior to the minutes to 47% and the terminal rate to 3.69% from 3.73% prior to the minutes,'' analysts explained. For that reason, US futures are pricing in a higher probability of a 50 bps hike for Sep after these minutes to around a 60% chance.
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