Today, two events will shake the US dollar. First, at 16:45 GMT+2, Markit, a statistical company, will release the US Flash Services PMI. Moreover, at 21:00 GMT+2, the Federal Reserve will release its meeting minutes.
Will the RBA support the Aussie?
The Reserve Bank of Australia announces the cash rate on Tuesday at 05:30 MT time.
Instruments to trade: AUD/USD, AUD/NZD, AUD/CHF, AUD/CAD
The interest rate in Australia has been reduced to the historical low of 0.1% during the last session. Previously, it has been lowered to 0.25% already due to the virus hit. Currently, there are some positive signs in Australia, boosted by the lifting of the restrictions in Victoria state. The quantitative easing program was recently expanded, and other key target rates, such as the three-year-bond yield, were kept in accordance with the cash rate reduction. While growth is expected in the third quarter for the GDP, the RBA board advised they are staying on high alert to aid the economy and make sure it sees no impediment for recovery. With the coming rate statement, we are not expecting a change in the rate itself. Rather, we will be looking for the “side” comments from the bank regarding the outlook and future policy plans. Positive moods will spur the AUD, while a dovish look will press on the Aussie.
- If the RBA sounds hawkish, the AUD will rise.
- If the RBA sounds dovish, the AUD will fall.
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