Aussie stays steady after RBA left the cash rate unchanged at 1.50% as widely expected. The accompanying statement provided little new information as the central bank also maintained a neutral stance. RBA elaborated on "mixed" labor market indicators and noted "considerable variation in employment growth across the country". It's pointed out that "part-time employment has been growing strongly, while growth in full-time employment has been subdued." Meanwhile, the economy is growing at a "moderate rate" with inflation "remains quite low". Technically, AUD/USD is staying in range below 0.7709 near term resistance for the moment and some more consolidation would be seen. Overall, this year's rise from 0.7144 is seen as a corrective move and should be limited by 0.7833 resistance for reversal.
Sterling remains the weakest major currency this week after being hammered by Brexit news. Prime minister Theresa May announced that she will trigger the Brexit process by March next year. Chancellor of Exchequer Philip Hammond warned that there will be at least two years of economic "turbulence" and a period of "fiscal uncertainty" ahead. Some economists noted that UK is opting for a so-called "hard exit" and give up access to the single market for control on immigrations. And, that would, in particular, cut off the access of UK financial institutions to EU. And that would be a main focus of the markets during the negotiation in the coming two years.
In US, Cleveland Fed president Loretta Mester said that November FOMC meeting is "live" and the case for rate hike would "remain compelling". She noted that "we have to be a little pre-emptive in making sure that we're moving the interest rate up so that we can keep the expansion sustained." On the other hand, New York Fed president William Dudley warned that "a risk management approach to monetary policy would suggest that the more concerned one is with the effectiveness of these policies at the zero lower bound, the more cautious one would be in the process of removing accommodation."
ECB executive board member Yves Mersch said that "there is a limit to how low interest rates can go -- the point at which the costs of lower rates incurred by the banking sector outweigh the benefits." He described the current interest rate level as "mildly negative" and emphasized he "would shy away from moving into 'wildly negative' territory." And, "cutting interest rates even more would come with increasing risks, as reactions to such cuts might not always be linear."
On the data front, Japan monetary base rose 22.7% yoy in September. Australia building approvals dropped -1.8% mom in August. Japan consumer confidence, UK construction PMI and Eurozone PPI will be released later today.