Dollar remains bid on mull possibility of Fed Sep hike - ANZ

Analysts at ANZ explained that markets were subdued with the US out for the Labor Day holiday.

Key Quotes:

"Nevertheless, the USD had a mildly firmer tone as investors continued to mull the possibility of a September FOMC move."

"That will rumble on but for now the focus is turning away from the US. The RBA is widely expected to leave policy on hold today, but there is growing speculation that the ECB may do something given that core inflation (Aug +0.8% y/y) remains stubbornly low."

"Oil spiked higher on reports that Russia and Saudi Arabia had agreed to work together but an absence of details of the “agreement” and confirmation from Saudi that there was no need to cut production now saw much (close to 2/3rds) of that that spike steadily unwind. WTI Crude is sitting at ~$45.20, having been as high as $46.50.

"European bourses were little moved on the day. Sterling failed to hold onto its gains following a better than expected services PMI."

"Kiwi price action mirrored that of the broader USD, coming off lofty highs around ~0.7340 to now sit around ~0.7300. Margin building in domestic fuel retailing is slowing the transmission of the high kiwi/high oil to pump prices, putting CPI under less downside pressure."