Today's Highlights

  • Central banks seeking evidence before further rate cuts

  • Euro loses ground but Brexit battle over Irish border remains a sticking point

  • US Dollar escapes negativity


Current Market Overview

The Reserve Bank of Australia (RBA) made it clear in their meeting minutes, published overnight, that they are seeking further evidence of a need before they cut their base rate any further.  That dented the hopes of those asking for lower base rates and strengthened the Australian Dollar by a cent against the Pound. If rates are falling, then yields are sustained and that is an incentive for international investors to buy or just retain AUD assets.


USD unscathed despite negative sentiment

A very similar sentiment was voiced by Eric Rosengren of the US Federal Reserve. He dissented when the Fed cut its base rate in July and is urging other committee members to seek certainty that the global slowdown will impact the US before cutting any further. The USD was unaffected, but we will get a speech from one of his colleagues, Randal Quarles, later today. He is quite well known for hinting at policy changes ahead of times.

The Euro lost a bit of ground yesterday when Eurozone inflation data was a tad lower than forecast. An annualised 1.0% inflation figure was below the expected 1.1%, pulled lower by 0.5% deflation in July. This morning’s rise in German producer prices has stabilised things, but the continuing disagreement between the UK and EU over the Irish border is still dominating the news. It seems no one wants one, but they can’t agree on what the relationship between the north and south of Ireland should look like. That’s a continuation of a 99 year debate and perhaps a 300 year history. Good luck.


Sterling remains stoic and awaits support from today’s data

Sterling is stoically clutching on to the $1.21 and €1.09 levels. We are expecting slightly less bad results from the Confederation of British Industry (CBI) Industrial Trends Orders Index this morning, when compared to last month’s minus 34 reading. Any reading above minus 25 would be considered supportive of the Pound.  Of course, anything that points to certainty on the ‘B’ thing would also be supportive.


Let the sun shine

And, if Carol Kirkwood is to be believed, which she definitely ought to be, we are in for a very warm bank holiday weekend in the UK. I mention this so you have time to get your sun cream brought up to date and try out your mankini or micro bikini in good time. Or to find somewhere cool to hide from the sun, of course. Somewhere with a bar, perhaps?

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Editors’ Picks

EUR/USD turns below 1.10 as market mood eases

EUR/USD has dropped below 1.10 as the market mood improves. Earlier, it hit three-week highs as the stock market crash and rush into bonds is raising the chances of the US Fed cutting rates. Further coronavirus headlines are awaited.


GBP/USD hits new 2020 low amid Brexit rhetoric, coronavirus headlines

GBP/USD has dipped below 1.2850, hitting a new 2020 low as concerns about a no-trade-deal Brexit are weighing on the pound. Coronavirus-linked USD weakness is minimal in this pair.


XAU/USD tumbles near two-week’s lows, sub-$1600/oz

Gold has been dropping sharply this Friday while reaching the 200 SMA on the four-hour chart. XAU/USD bulls gave up as sellers took the market down sharply. The bears seem to be in charge and more down could potentially be expected. 

Gold News

WTI remains under pressure around $45.00

Nothing new around crude oil prices, with rising concerns on the Chinese COVID-19 and its potential impact on the economy and the demand for the commodity keeping traders’ sentiment well depressed.

Oil News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

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