The
decision takes place tomorrow at 03.30 London time. Out of 30 economist polled
by Bloomberg 40% of economists are looking for a 25 basis point cut from 2% to
1.75% Recently the CPI data has been weak
and there have been concerns about Chinese demand for natural resources
resulting in a sluggish domestic mining sector.
On the
other hand local banks have recently hiked residential mortgage rates to cool
an overheated housing market and to recoup the cost of increased capital
requirements
I am
adopting the ‘wait and see approach’ towards the RBA believing that any drop in
the Aud/Nzd cross is a buying opportunity from the present 1.0550 level. Fundamental rate spreads between the two
countries are arguing for this pairing to be trading closer to the 1.10 than
parity level. Last week the RBNZ was
dovish with an explicit easing bias repeated, “Some further reduction in the
OCR seems likely”.
There
is a lot of data this week, the RBA tonight, the BOE on Thursday and then the
NFP on Friday
Good
Luck
Anish S. Lal @anish8fx
FX & Precious Metals, Atom8
Financial Services LLP
2nd Floor, Centenary House, Palliser
Road, London W14 9EQ, UK
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for you. Before deciding to trade your live account, you should carefully
consider your investment objectives, level of experience and risk
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trade with funds you cannot afford to lose. You should be aware of all
the risks associated with foreign exchange trading, and seek advice from an
independent financial advisor if you have any doubts.
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