The RBA decided to cut rates for a second consecutive meeting, taking their cash rate to a record low of 1%. In the statement, the RBA suggested that the bank may not be in a rush to cut in August unless pressed. However, the bank will “continue to monitor developments in the labour market closely” which leaves the potential for further easing.

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Theresa May’s replacement is creating a lot of headlines and until now is keeping the GBP under pressure. There seems to be some uncertainty if Boris Johnson would be willing to let the UK leave the EU without a deal. On the other hand Jeremy Hunt seems to be placing more weight on an orderly Brexit. The EU has stated that it will not accept any renegotiation of the deal and time limits seem to be tight, given the summer recess, for any meaningful renegotiation. 

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