The main event of Tuesday morning was RBA’s meeting that brought no changes to the Australian monetary policy. As for the other currencies, dollar pared part of its yesterday losses, but as we are awaiting ISM index due later today, more pain could be ahead. 

As it was widely expected, the Reserve Bank of Australia chose to leave interest rates unchanged. The Australian dollar slipped in the aftermath but erased losses quickly as well. As usual, the devil is in the details, hence the statement could have had the largest impact on the currency but it didn’t too much. Despite the dovish tone, AUD buyers were selling off the currency very short time, then they decided to reverse positions.

We could have seen quite a massive sell-off of the US dollar on Monday’s evening which might be ascribed to another wave of negative political revelations which came from the White House yesterday. US President Donald Trump decided to remove Anthony Scaramucci from his new job as White House communications director on John Kelly’s first day as chief of staff, just 10 days after the financier joined President Donald Trump’s staff.

Speaking about the USD, the currency has been beleaguered of late and even sturdy economic growth in Q2 (a preliminary reading) was not able to buoy the currency. Another big chance for the greenback could come on Friday as the NFP report is scheduled. The most important issue is wage growth, hence today’s ISM release should be scrutinize in that respect. 

The UK economy seems to remain in a decent shape despite all the political uncertainty that has been related to legislative elections and incoming Brexit negotiations. While industry saw a setback in June, it quickly recovered in July, offering Bank of England another argument to consider an interest rate hike at the incoming meeting on Thursday. The manufacturing PMI increased from 54.2 (revised from originally reported 54.3 pts.) to 55.1 pts. providing a hope that election-related uncertainty had only a short lived impact on the markets.

Let us recall that we wrote more about a relationship between the DE30 and the EURUSD. It could have massive reverberations for the German equity markets in the longer-term, hence cautiousness in buying could be warranted. However, assuming that the index is able to maintain above 12080 points and then it’ll break a short-term trend line, bears could lurk in the vicinity of 12200 points again. In turn, a breakout to the downside of 12080 could spur a larger downward move.

We should also mention Bitcoin in our morning wrap.  On August 1st at 12:20 UTC a new cryptocurrency called Bitcoin Cash will be launched. That could a moment of truth for the cryptocurrency as rumours state that buyers were active ahead of the launch which helped Bitcoin to rally. If so, then a reversal could occur.