- RBA leaves base rate on hold
- Independence Day leaves markets quiet
By David Johnson
It is the 4th of July and Americans are celebrating their independence. They won through conflict and the UK is seeking to win its independence through negotiation but the principle is the same. I wonder how far into the future it will be before June 23rd is declared Britain’s Independence Day.
Overnight tonight has the potential to be volatile. The lack of traders in the US will leave the USD free to roam but substantial volatility will only happen if there are events outside the US. Having failed to break above $1.30, the Pound has slipped again but not collapsed. Another test of $1.30 shouldn’t be ruled out but neither should we rule out a fall to 1.27.
The Reserve Bank of Australia left the Aussie base rate on hold when they met overnight. In spite of improved Aussie retail sales, the RBA’s decision has allowed the Australian Dollar to weaken a little but the GBPAUD rate is still below the long term resistance level at A$1.72. If that level breaks, a rally to A$1.75 is likely to happen pretty quickly.
Other than a few central bankers making speeches, today is very quiet on the data front, so nothing much more to report from me.
I’ll leave you with news of a reversal. The Bermuda triangle is famous or infamous for being the site where things disappear. By way of a reversal, a new island has appeared off the coast of North Carolina. Named Shelly Island by the locals (it is covered in shells), it has caused concerns for the local authority because there are a lot of sharks in the area and the currents around this sand bank are very strong. It hasn’t arrived with long lost galleons or sailors though.