Today's insight: RBA on hold and may remain so | Sterling slips on public disorder concerns

RBA on hold and may remain so

Michele Bullock, the Governor of the Reserve Bank of Australia, announced an on-hold decision early this morning. In maintaining the Aussie base rates at 4.35%, Governor Bullock also stated that progress on inflation had been slow for the last year and that interest rates may need to stay higher for longer than anticipated in order to fight the risk of further inflation. ?Sterling had a rough Monday and the GBP/AUD rate had already fallen to AUD 1.9575 ahead of this announcement. As such, although there was a bit of volatility around the announcement and the statement, the overall impact on this currency pair has been negligible. We are at AUD 1.9585 this morning.

Sterling slips on public disorder concerns

Despite encouraging UK service sector purchasing managers indices, the pound had a poor day on Monday, slipping against most other currencies. We will get the July construction sector purchasing managers index today and that too is expected to be an improvement on the 52.2 we saw in June. However, the thing that is damaging the pound is the civil unrest spreading across Britain’s city centres. We saw further riots last night with clashes between pro and anti-immigration groups. The police and local businesses took the brunt of everybody's ire. The UK Prime Minister has only been in office for a month and yet his approval ratings have fallen through the floor as he clashes not only with his electorate but also with none other than X and Tesla owner, Elon Musk over his branding of Indigenous Brits as ‘far-right’. With this kind of disorder raging around the country, it is unsurprising that investors would move their funds away from UK assets. In the interbank market the pound is down to USD 1.2745, EUR 1.1660, ?AUD 1.9600, NZD 2.1520, CAD 1.7640 and CHF 1.0910.?

Today's Major Economic Releases

04:30 AUD RBA Interest Rate Decision?

04:30 AUD RBA Monetary Policy Statement?

04:30 AUD RBA Rate Statement?

05:30 AUD RBA Press Conference?

09:00 EUR Retail Sales (YoY)?(Jun)?

22:45 NZD Employment Change?(Q2)?

22:45 NZD Unemployment Rate?(Q2)?

Interbank Exchange Rates