Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
Can you win with the AUD?
RBA Rate Statement is released on Tuesday at 07:30 MT time.
Instruments to trade: EUR/AUD, AUD/USD, GBP/AUD, AUD/JPY
Australian monetary policymakers already slashed the interest rate twice in March. By reducing it to the current level of 0.25%, they tried to enhance the domestic economic environment and give it the maximum possibility to recover from the coronavirus. Given the fact that the Chinese economy – the main trade partner of Australia – is already gaining back its powers, Australia should have an improved economic outlook by the time the new rate is released. The Reserve Bank of Australia (RBA) explained that there will be no intention to raise back the rate until inflation gets to 2-3% channel and full employment is reached.
- If the rate is held steady at the current level, the AUD will rise.
- Otherwise, it will fall.
The Canadian central bank will make a monetary policy report and announce interest rates on Wednesday, January 20, at 17:00 MT time. Also, the BOC press conference will be held later.
USD’s rally takes a pause, while riskier assets are modestly rising.
We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.