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AUD

EU deal sparks AUD rally ahead of RBA

Global financial markets bounced higher on Friday after a key European Union deal about migration boosted sentiment.

A Europe-wide disagreement about migration levels had sparked political unrest in Germany but Friday’s deal was seen as helping German chancellor Angela Merkel maintain power.

Sharemarkets around the world recovered from their recent losses with the German DAX up 1.1% and the US’s Dow Jones index up 0.2%. The AUD benefited.

AUD higher

The AUDUSD climbed 0.7% as it hit one-week highs.

The AUDEUR fell as markets reacted to the EU deal. The euro gained.

The AUDCHF was flat while the AUDJPY jumped 0.9%.

RBA in focus

This week’s focus is on the Reserve Bank of Australia meeting due tomorrow.

In the minutes released on 19 June, the RBA removed the reference to the central bank’s next move – previously said to be “up” – in a change that caused markets to believe the RBA had become more cautious on the Australian economy.

As a result, tomorrow’s RBA statement might be even more closely scrutinised than usual.

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