FX analysis – AUD whipsaws ahead of RBA, USDJPY inches higher with BoJ in sight, XAUUSD holds support

Mondays FX trade was relatively quiet on ahead of a some key central bank meetings today in the RBA and especially the BoJ.

USD saw gains with the Dollar Index (DXY) rising from lows of 103.33 to highs of 103.65, with the index heading into APAC trade near Monday’s session high after yields were higher across the curve ahead of key risk events this week.

JPY stuttered against the Dollar with USDJPY rising slightly and holding above the 149 level ahead of today’s BoJ rate decision. The latest from Nikkei suggests the BoJ is set to end NIRP, end YCC and also end ETF purchases at today’s meeting. Markets are not fully convinced though with rates futures pricing in around a 50-50 chance of a move from the BoJ today, with April being the timeline some economist’s favour.

AUDUSD was flat ultimately flat with AUDUSD rallying modestly in the APAC and UK session before paring gains in the US session ahead of today’s RBA meeting. The Aussie central bank is widely expected to hold rates, but it will be the statement and presser to see what level of tightening bias (if any) the RBA still holds that will move the Aussie.

Gold bounced back modestly, despite a mostly bid USD and higher yields, finding buyers and holding the key 2150 USD an ounce support level.