Reserve Bank of Australia Leaves Cash Rate Unchanged at 3.85%; Trump Unveils First Wave of Steep Tariffs; Stocks Gaining, US Dollar Loses Ground, Euro Higher on 10% Eurozone Tariff Rumor
Summary: The reserve Bank of Australia confounded expectations a few hours ago by refusing to cut its Cash Rate although it was expected to do so by 0.25%, which sent the Aussie trading higher in the Forex market.
- The RBA left its Cash Rate unchanged at 3.85%, sending the Australian Dollar trading higher. The Bank was expected to cut its rate by 0.25%, but did not, hinting at concerns over inflation while strongly suggesting there will be a rate cut in August. There is increased speculation that the cut in August might now be larger than 0.25%.
- President Trump has unveiled a first wave of new tariffs, although he has said some of them might still potentially be negotiated away. Trump is imposing the following tariffs by country:
- 30%South Africa
- 25% Kazakhstan
- 25% Malaysia
- 40% Laos
- 40% Myanmar
- 25% Tunisia
- 30% Bosnia
- 32% Indonesia
- 35% Bangladesh
- 35% Serbia
There is a report that the US is offering the EU a 10% deal behind closed doors, which has helped boost the Euro today. Despite the announcement of higher tariffs on Japan and South Korea, both their stock markets ended today higher.
- Stock markets are mostly higher so far today.
- Silver remains within sight of its long-term high price. The precious and industrial metal has begun rising again over the past few hours.
- In the Forex market, the Australian Dollar has been the strongest major currency since today's Tokyo open, while the Japanese Yen has been the weakest, putting the AUD/JPY currency cross in focus today. The EUR/USD currency pair has also begun rising again, and it has been in a valid long-term bullish trend for some time.
- It is likely to be a relatively quiet day in the markets as there are no high-impact scheduled data releases until tomorrow's Reserve Bank of New Zealand policy meeting.