RBA hints at further easing

Today's Highlights

RBA hints at further easing

Mixed EU indices leave euro adrift

FX Market Overview

The minutes from the last reserve Bank of Australia meeting showed a strong potential for further interest rate cuts but that enthusiasm was tempered by a cautious note. Members of committee decided they needed more evidence that the economy is in fact slowing before they started agreeing to rate cuts. The Australian Dollar was largely unchanged on the news.

However, the Sterling - Australian Dollar exchange rate is a tad lower this morning because the Pound has drifted lower in line with expectations ahead of the UK election. Maybe traders are concerned about the prospects of the tail of a Scottie wagging the English bulldog, the Irish wolfhound and the Welsh corgi. I won't continue with the dog analogy because therein lies the threat of a law suit. Nevertheless, election claims and counterclaims are having an impact. Sterling is sliding ever so slightly but I suspect we will see further weakness in the days ahead unless tomorrow's MPC minutes are remarkably upbeat or Thursday's retail sales are similarly strong.

The euro will pick up some strength this morning after a very robust Eurozone ZEW economic expectations index. However, that was tempered a little by a poorer than expected German index.

And just because you are paranoid, doesn't mean they aren't out to get you. Or, in this case, life is out to get you. Agoraphobic Janet Faal was so afraid of leaving her house that she had only been out 2 times in the last ten years but she summoned up the courage to make her third sortie into the outside world only to promptly fall into a manhole. The fall resulted in a suspected broke leg, a broken nose and an even more robust fear of life outdoors. Fate can be so cruel.