Oil prices are rising and Russia banned the export of its petrol. What's happening in the markets?
Will RBA press AUD down again?
What will happen?
The Reserve Bank of Australia will make a rate statement on March 2, at 5:30 MT time. Last time, the Reserve Bank of Australia kept the interest rate at a record low of 0.1% and pledged to maintain rates on hold until at least 2024. Besides, the central bank claimed it would extend its bond-buying program by an extra $76.2 billion.
How to trade on RBA statement?
Australia is enjoying a V-shaped recovery as the Covid-19 pandemic is almost taken under control. Therefore, the RBA is ready to tighten spending (reduce its bond-buying), but if it implies it at the current time, it will risk sending the AUD soaring and damage exports and jobs. The main aim for the RBA now is to stop the aussie from rising too much, that’s why it would continue its massive support.
- If the RBA tightens spending, the AUD will strengthen;
- If the RBA expands bond-buying, the AUD will weaken.
Instruments to trade: AUD/USD, AUD/NZD, AUD/JPY
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