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The Australian dollar is broadly unchanged on the day, as it is on the month, and traders are unsure which way to turn after the currency dropped just shy of 10% between May and July.
The month of May proved to be crucial for the currency as the Reserve Bank of Australia (RBA) cut interest rates to an all-time low of 2.75% and the US Federal Reserve hinted at curtailing their stimulus package, which represents both Australian dollar weakness and US dollar strength.
Although not over yet, the month of July has been relatively quiet; a number of mixed economic reports could indicate that the Fed may taper their stimulus package as early as initially thought. Adding to that, the slowdown in the Chinese manufacturing sector could be offset by Beijing’s rail projects.
The governor of the RBA will make a statement on Tuesday. If Glenn Stevens makes any comments about possibly cutting interest rates again, we could see traders sell the Australian dollar.