Overnight, the Reserve Bank of Australia lowered interest rates for the 3rd time in a 5-month period. The official cash rate was reduced by 25-basis points from 1% to 0.75%. The move comes in response to a domestic slowdown but also external factors, including subdued global growth as well as on going US/China trade tension.
The Aussie dollar has responded negatively. The RBA’s accompanying communication has left the door open for further stimulus should it be warranted. The A$ has fallen against its peers, at the time of writing the GBPAUD pair finds itself up just over 1 cent or 0.60%. The pair currently trades around the A$1.8320 mark with resistance a little further up at the A$1.85 level.
The pound is likely to remain volatile today as the Tory Party Conference continues. Yesterday’s speech from Chancellor Javid displayed how the Tories are preparing for the general election which appears on the horizon. Within Javid’s words were clear digs at his predecessor, he ensured the audience recognised their differences and that he’d be more than willing to spending money where needed.
Today is the first day of a new month and therefore we’ll see the usual round of global manufacturing PMIs. These will stem from the Eurozone, UK, US and Canada. Due to the data-heavy nature of the day it could result in being a volatile one!
Written by Viv Savani. 8:43am, October 1st 2019
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