Aussie Dollar spikes after upbeat Reserve Bank of Australia minutes [Video]

Today's Highlights

  • Aussie Dollar spikes after upbeat Reserve Bank of Australia minutes

  • Euro stronger on inflation numbers

  • UK inflation awaited

 

Current Market Overview

A rise in the June Eurozone inflation figures saw the Euro regain some strength through Monday. The GBP-EUR rate dropped back from the high 1.14s to mid 1.13s again and the Euro - US Dollar rate pushed up above $1.15 for the first time since May. There is a lot of USD buying interest in this area though, so there will need to be something more than a short term inflation blip to push the Euro higher. This morning’s ZEW Economic Sentiment Index for the Eurozone could well be enough to give the Euro another blip. So Euro buyers beware.

Part of the US Dollar’s weakness stems from the US President’s inability to pass laws. The repeal of Obamacare appears to have failed and that is the second big election promise Donald Trump has been unable to keep, despite having majorities in both the senate and Congress.  If you can’t convince your supporters, you have a problem….Bigly.

For its part, Sterling offers mixed signals. Back down to Friday’s levels against the Euro, but up to its highest against the US Dollar in 10 months, with an eye on $1.32 from a technical perspective. UK inflation figures are due for release at 09:30 GMT and that could push Sterling back up the pole if we see 3.0% on the year as some are forecasting. We are also likely to see comments from comments from Bank of England (BoE) Governor, Mark Carney, this afternoon.

Overnight news included inflation data from New Zealand and that was well below expectations at 1.7%. The markets had envisaged a 1.9-2.0% figure. The NZ Dollar weakened on the news, as it downplays any hints of interest rate hikes from the Reserve Bank of New Zealand (RBNZ).

We also saw the minutes from the last Reserve Bank of Australia (RBA) meeting. The upbeat nature of the meeting surprised trades and the Australian Dollar strengthened against all comers on the news. The Sterling – Australian Dollar rate fell 2.5 cents and is now down to levels we haven’t seen since April. There should be support for the Pound around A$ 1.65 but, if that fails, A$ 1.6150 offers trend line support for the Pound.

And taxi drivers in Stafford are hot under the collar after council bosses handed down a new dress code. Only two buttons of their shirts can be undone, logo T shirts are banned and flip flops shall not be worn. I can’t see anything in the regulations that deals with political views or football opinions, more’s the pity…

 

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.