RBA’s Steady Rates: Euro Falls, Pound Slides
Today’s Top Data:
The Reserve Bank of Australia (RBA) kept the interest rate steady at 4.35% aligning with expectations. This decision was expected, given the recent stability in inflation and growth rates in Australia.
Major Currency Pairs Overview
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EUR/USD: A downward trend is somewhat seen in the pair, trading around 1.0950, driven by mixed signals from the European economy influencing pressure on the euro. This is partly due to weaker-than-anticipated industrial production data from Germany.
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GBP/USD: The pound stays in a downtrend and prices move near 1.2750. Only recently, the Bank of England has voted narrowly to trim rates by 25 basis points, and that has failed to show meaningful support to the pound.
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USD/JPY: Trades lower near 145.00 due to a stronger yen, which could be seen after the latest decision by the Bank of Japan to raise its rates to 0.25% with a plan for bond tapering. That more cautious stance has strengthened the yen amid uncertainties in the global economy.
Commodities
- Oil: Crude oil prices are trending downwards with WTI crude hovering around $82 per barrel. This can be blamed to decreasing demand on the global side and an increase in US crude inventories.
- Gold: Gold prices are the slightest bearish, now hovering around $2,450 per ounce. Though geopolitical tension in the Middle East supports as a safe haven, the precious metal is meeting headwinds from a stronger dollar and rising US Treasury yields.
Political and Economic News
Global markets are reacting to heightened geopolitical tensions, mostly after the killing of a senior Hamas leader that raised Middle East tensions, while in the US, an unexpected spike in unemployment has triggered speculation of a rate cut by the Federal Reserve as early as September. BBC Business