Australian PM under increasing pressure

Tony Abbott will present a major speech to the Press Club later this evening and many expert analysts are predicting that his immediate political future will depend on his performance. His ruling Liberal Party suffered a humiliating defeat in weekend state elections and Mr Abbott has fallen out of favour with his own party after some recent ‘gaffes’.

This will add to short-term volatility for the AUD as no-one likes uncertainty.

Tomorrow’s RBA decision will of course also add to the uncertainty and whilst all the weekend papers seem convinced that the RBA will cut rates, I personally don’t think they absolutely need to and therefore won’t (although the statement will undoubtedly be more dovish).

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