RBA hold rates – but further easing is to come

<p>The Euro showed yesterday how it is still struggling to hold gains after pushing to highs of around 1.1240 following a better than expected inflation data release, […]</p>

The Euro showed yesterday how it is still struggling to hold gains after pushing to highs of around 1.1240 following a better than expected inflation data release, only to fall back below 1.1200 by the close. Today, a similar pattern has followed with a break back above the 1.1200 handle as German retail sales beat expectations to give it a boost. We still await more Greek information, with the latest being mixed views of a possible third bailout on the table, but this was denied by EU’s Juncker yesterday.

The Aussie was the main focus point last night as the RBA announced that they were to hold the 2.25% rate steady and disappoint the bears. This was followed by a statement of possible easing in the coming months, which is why we only see the AUD up 60 points but back above the 0.7800 handle. With data expecting to come out stronger from Australia tonight with the GDP, we could see this hold above 0.78 – but the RBA won’t be far behind to try and get the AUD/USD down to the 0.75 level they want.

In the UK the construction PMI is to be released at roughly the same as last time at 59.1. These releases can always have snap reactions, depending on how they are perceived. This morning cable is up around 20 pips on the close as it gets close to getting back above the 1.5400 handle, its next hurdle.



 1.1150-1.1110-1.1065  | Resistance 1.1230-1.1280-1.1315



119.80-119.40-119.20 | Resistance 120.40-120.60-120.95



1.5330-1.5300-1.5250 | Resistance 1.5415-1.5465-1.5495

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