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Forex Today: Reserve Bank of Australia approves rate hike

Forex Today: Reserve Bank of Australia approves rate hike

The Reserve Bank of Australia decides to leave its interest rate unchanged, as was widely expected.

➡️ In his political meeting a few hours ago, the Reserve Bank of Australia decided to leave its interest rate at 4.10%, saying “higher interest rates are working”. This was widely expected and didn't cause any real surprise, but it still caused the Australian dollar to fall a bit against every other major currency.

➡️ The risk-on rally that got renewed momentum last week from strong U.S. economic data that showed no signs of rising inflation may peter out. Stocks are generally mixed, especially in Asia where we saw the Hang Seng Index and Nikkei 225 Index diverge. There was little movement in US stock markets yesterday on thin trading, with the major US July 4th holiday that was starting. US markets will be closed today, likely reducing global volatility.

➡️ The Japanese yen remains the weakest major currency in the long term. On Friday we saw the USD/JPY currency pair make a new 7-month high above 145 yen. Trend traders will remain interested in staying against the Japanese Yen, which also hit a multi-year low on Friday against the euro. The governor of the Bank of Japan defended his ultra-loose monetary policy by pointing out that underlying inflation remains below the Bank's 21TP3Q inflation target, although the headline rate is now above 31TP3Q.

➡️ In the Forex market, the Japanese yen and the British pound were the strongest major currencies of the Asian session, while the Australian dollar was the weakest. The US dollar continues to rise today after Friday's rally, with the dollar index starting to suggest that it may soon establish a new long-term uptrend technically, but its chart pattern is still strongly indicative of consolidation.

➡️ Cocoa futures continue to rise to new multi-year highs, attracting trend traders to the Long side. The move is driven by strong demand and poor harvests in parts of Africa.

➡️ Bitcoin closed yesterday above what appears to be a very crucial round number at $31 thousand, suggesting that a major bullish breakout may be underway.

 

Credit by DailyForex.com

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