Stevens Jawbones, RBA Minutes Next

Divergent comments from Stevens and Poloz sent AUD and CAD in opposite directions Monday. On the day, the US dollar was the best performer while the Aussie lagged. The RBA minutes are next. The RBA talk helped the Premium GBPAUD long, while weighing on  EURAUD short. EURUSD, USDCAD, NZDUSD, EURGBP remain in progress.

We warned to start the week that the optimism about AUD after the Chinese rate cut might not last. The high of the day came minutes after the open at 0.7840 and a steady slide turned into a drop after Stevens spelled out the RBA stance by saying rate cuts are still on the table.

AUD/USD fell to 0.7715 as he said the RBA had clearly signaled rates could be cut again. It fell a few more pips when he said he would be surprised if the Australian dollar doesn't fall further. The comments come ahead of the RBA minutes at 0030 GMT and diminish the importance of the report. The risk might be for further losses if the minutes sound like a cut could be coming sooner rather than later.

In Canada, Poloz was singing a completely different tune – different from the man who cut rates less than three months ago. On Monday he talked about a Q2 recovery, was upbeat about global growth. The 'biggest risk', he said, was that the US economy would be stronger than anticipated. To further drive home the point, he said the BOC is neutral. The Canadian dollar also got a boost from a rally in oil prices and USD/CAD fell back to 1.2180 at the lows.

A month ago, talk of BOC cuts was rampant but now it's off the table in the short term. USD/CAD has some downward momentum at the moment but there is still some trouble in the Canadian pipeline, at least more than Poloz lets on.