RBA rates on hold - Aussie Dollar weakest for 6 years

Today's Highlights

RBA rates on hold - Aussie Dollar weakest for 6 years

Greece in end-game negotiations

UK data forecast to be positive

FX Market Overview

Today marks the 10th anniversary of the attacks on London's transport network in which 52 innocents were slain by suicide bombers and over 700 people were injured. Insanity, it is said, is the act of doing the same thing over and over again and expecting a different outcome each time. For how many centuries have zealots killed innocent people in the name of twisted ideologies? Has anything changed?

The Greek story is set to continue to dominate foreign exchange news. The odds on Greece leaving the Eurozone are shortening and many are pressing them to do so. The German and French negotiators are not aligned over their stance and the Greek government has a major uphill struggle if it really does want to retain the euro but jettison the debt. The Sterling - Euro exchange rate looks like a cartoon character that has just run off the end of a cliff and is suspended in mid-air. Either it will do the bug-eye comic second look and plummet with a loud wheeeeeee or a rocket will appear from below and shoot it into the stratosphere. In this instance, that rocket would have 'GREXIT' written on the sides in very large font. Do you get the impression I am running out of things to say about Greece? Moving on......

The Reserve Bank of Australia kept their base rate on hold at the historically low 2.0% when they made their announcement early this morning. That pushed the Sterling - Australian Dollar exchange rate to its highest in 6 years. That is precisely what the RBA was hoping for because they see a weak AUD as a means to improve exports. That is true as long as overseas clients are buying but with the slowing Chinese economy, Australia may get all the weakness it needs without the corresponding export pick up. GBPAUD is at the top of its range and looking overbought at this level. This looks like a great AUD buying opportunity

Today's data diary is a little light on tier one data but we will get the UK industrial and manufacturing output figures. Both are expected to be strong, so be ready for further GBP strength as well. We will also get the British Retail Consortium's shop price index later tonight but that is likely to be less bullish.

And US engineering firm, MegaBots has challenged Japan's Suidobashi Heavy Industry to a duel. Both companies produce robots so, assuming all goes well, we will get to see two seriously col robots go head to head in a fight. Skynet is only a heartbeat away people. If either of these robots says, "I need you clothes, your boots and your motorcycle." Just give it to them.

Quote

Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.

Winston Churchill