Happy Friday, traders! Are you ready to trade at the end of the week? Here’s what you need to know before you start:
What Will Australian Cash Rate Bring?
What will happen?
The Reserve Bank of Australia will make a statement about the cash rate on April 5, at 07:30 MT. This release comes out on every first Tuesday of a month. The cash rate is charged on overnight loans between financial intermediaries. This is a major event for AUD.
Possible AUD moves
According to the RBA last statement, the cash rate might rise if not for the obstacles that delayed it. In particular, the war in Ukraine brings more uncertainty. Despite the Australia’s economy remains resilient, inflation rose faster than the RBA expected. Nevertheless, it remains lower than in many other countries – now it’s 4%. More hawkish steps are planned for 2023.
After the March 1 release, the AUD went up. That day AUDUSD jumped by about 0.50%.
How to trade on the Australian cash rate release?
If the Actual reading is better than the Forecast, then it’s good for the currency. Therefore, a surprise rate hike will propel AUDUSD. Moreover, the AUD will get higher if the RBA is optimistic about the national economy. Conversely, if the RBA is cautious and doesn’t hint at the upcoming rate increases, the AUD will move down. Overall, not only Australia but also the other countries contemplate hawkish steps. Thus, the upcoming release is essential as the RBA may offer clues on its future decisions.
Check the Economic Calendar.
Instruments to trade: AUDUSD, AUDCHF, AUDNZD, AUDJPY
Now traders follow the economic events with new vision as inflation in the US seems like decreasing. Let’s see what releases will influence the market due to that factor.
The week will have the biggest event in the US political process over the last two years. How will the elections affect the Forex market? We covered the most important news of this week in this report.
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.