What events to follow and how to trade during the week of July 2-6?
Will the RBA support the AUD?
What will happen?
The RBA will announce its Cash Rate on April 6, at 07:30 MT time.
During the last session of the RBA, the Cash Rate was held steady at a record low of 0.1%. The Bank explained it was committed to keeping the rate at that mark until and unless the economy recovers to the inflation rate’s target range of 2 to 3%. The latter is far away from the current dynamic and is not expected to be reached earlier than 2024.
How to trade the RBA Cash Rate announcement?
Because of the above, no change to the rate is expected. In the meantime, what we will be looking for is the assessment of domestic economic dynamics and resulting actions from the RBA. The latter is ready to step in and adjust its bond purchases according to the situation. If the economic indicators are good, and no intervention from the RBA is required, it may be taken as an optimistic impulse that may boost the AUD.
- Optimistic/hawkish RBA tones may push the AUD;
- Weak outlook/dovish notes will press the AUD.
Instruments to trade: AUD/USD, AUD/CHF, AUD/CAD, AUD/JPY
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The Bank of England will publish a monetary policy statement and update on the interest rate on Thursday, at 14:00 MT time.
The Reserve Bank of Australia (RBA) will hold a meeting and announce changes to the monetary policy on August 3, at 07:30 MT time (GMT+3).