By Perry Mitchell
The Aussie Dollar has been consolidating within narrow ranges and is trading flat this morning after hitting a recent 12 week high around 0.7080 on Friday. We now await statements and monetary policy clues from the RBA’s Kent this morning who is scheduled to deliver a speech in Sydney this morning. The currency continues to be underpinned by the expectations of a 25 Basis point rate cut by the U.S Federal reserve next week. The chance of a more aggressive 50 Basis point rate cut is now below 20% helping to put a cap on gains.
The tensions between the U.S, U.K, and Iran continue to simmer away in markets with respect to the Iran noise on Friday announcing that Iran had seized a British Oil tanker.
As it was reported yesterday, this week is fairly light on the economic data release front with the focus remaining on Wednesday’s outcome for who will be the Prime Minister of the U.K. Along with this, we wait for the ECB interest rate decision on Thursday night. It is widely expected to keep interest rates on hold. It is expected that the ECB will cut its deposit and refinancing rates 10 basis points to -0.50% and -0.10% respectively in September.
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