Global markets opened 2016 in tense mood reminding investors that the big themes of last year haven’t gone away. The Chinese economic slowdown and the commodities story continue to have huge ramifications across global markets and currencies in particular.
The Australian dollar was also in upbeat mood. Yesterday’s meeting of the Reserve Bank kept interest rates on hold at 2 percent (as widely expected) for the sixth month. The weakness in US fundamentals gave traders an excuse to buy the beaten down Aussie again.
GBP/USD was testing the lower range at 1.51 with upward breaks of any size being quickly sold down again. Mark Carney, governor of the Bank of England declined to offer any support to the Pound in his speech yesterday. Instead Mr Carney focused on the global economy and the impact of climate change.