MArket wrap: dollar drops to a 10-month low - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: US interest rates fell amid news the US healthcare reform bill had failed, helping drag the US dollar to a 10-month low. The top performing currency was the AUD.

Interest rates: US 10yr treasury yields fell from 2.31% to 2.26%, 2yr yields from 1.36% to 1.34%. Fed fund futures yields priced the chance of a December rate hike at around 43%.

Currencies: The US dollar index is down 0.5% on the day, to a 10-month low. EUR rose from 1.1520 to 1.1583 – a 14-month high. USD/JPY fell from 112.35 to 111.69. AUD was the day’s outperformer, surging after the RBA minutes and continuing g overnight to 0.7943 – the highest level since May 2015. NZD nudged a little higher, recovering from its CPI disappointment, to 0.7373 – a five-month high. AUD/NZD pushed higher to 1.0801 – a two month high, and well above the 1.0650 level traded before the RBA minutes yesterday. Iron ore prices were also AUD/NZD supportive, gaining 2% yesterday for a total 29% gain since mid-June."

"US: Jul NAHB homebuilder sentiment index slipped in July from 67 to 64 (vs 67 expected).

NZ: GDT dairy auction saw little price movement overall, up just 0.2%. WMP was up 0.3%, SMP down 3.2%, and the star performer lately - butter - up 3.4%."