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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

Eyes on the RBA rate decision

Published August 7, 2018

Author: Dennis Li

No surprises last night with very little change on the Aussie against the US with market participants awaiting the result of the RBA rates decision today which is widely expected to be held unchanged at its record low level of 1.5% since August 2016. Trade tensions between the US and China, as serious as they are, appear to be taking a back seat at the moment with some observers suggesting the US is gaining the upper hand after softer Chinese data and equities activity.

  • The USD edged up against its major peers as the US-China trade tensions helped boost the USD, with the US dollar index reached its high of 95.523 overnight.
  • After the British trade minister Liam Fox warned that the nation was headed for a no-deal Brexit, the sterling dropped to an 11-month low of 1.2917 overnight against the USD as investors concerned that Britain could soon leave the EU without securing a trade agreement. The AUDGBP reached its near two-month high breaking the resistance level of 0.5700 in the last 24 hrs.
  • Oil futures gained overnight as the US prepares to reinstate sanctions against Iran, raising concerns about global oil supplies.
  • The EU vowed on Monday to counter US President Trump’s renewal of sanctions on Iran to preserve a deal that limits Iran nuclear ambitions.

After today’s RBA announcement and Governor Lowe’s speech tomorrow there isn’t much to push the AUD any higher than the recent tight ranges. The AUD/EUR has gained solid ground over the last 24 hours but is hitting a ceiling at 0.6390.