The Reserve Bank of Australia (RBA) held monetary policy unchanged for the 15th straight session this morning, with interest rates remaining at 1.50%, in light of the Bank's signal of strong Australian growth outlook. This gave the Australian dollar some support rising by 0.6% to 0.7652, the highest levels since November 13.
Yesterday, the US dollar received significant support after the US Senate approved tax reforms aimed at reducing corporate and individual taxes. These will be the biggest changes in US tax laws since the 1980s aimed at boosting the US economy, and talks between the Senate and the House of Representatives this week will likely begin to reconcile the two versions of the law.
The USD index is still trading below a strong resistance area at 93.33/44 where the second shoulder in a head & shoulders pattern may form on the daily chart if prices exceed 92.56.
Brexit negotiations are still facing some troubles, however British Prime Minister Theresa May and the president of European Commission Jean Claude Juncker have expressed their confidence in reaching an agreement before the Euro summit which will be held in mid-December.
Negotiations have been progressing so slowly because the EU wants to reach an agreement on a range of issues, including the rights of citizens, the Irish border, and the amount Britain must pay to leave before talking about any trade agreements following the exit.
The stumbling of the negotiations reflected on the British pound, which recorded its biggest drop in more than a month, reaching the lowest level since November 29 against the US dollar at 1.3369.
Oil prices are currently stabilizing at $57 a barrel and Brent crude at $62 a barrel, following news of a drop in OPEC production. This comes in light of the extension of the cut production agreement last Thursday, which extends the cuts to the end of 2018, besides the expectations of drop in US crude inventories. US oil production next year will play a major role in global supply and price stability.
