Australian Consumer Price Index (CPI) data came in over night and showed a drop from 1.3 to 1.0. Quite a significant drop, CPI is a measure of inflation and is a key factor in any interest rate decision. The sharp fall could well force the Reserve Bank of Australia’s (RBA) hand. The next Australian Interest rate decision is 2nd August, if there is a cut it could create a small window of opportunity for AUD buyers.
The Bank of England (BOE) are due to make a an interest rate decision on 4th August and it is widely anticipated there will be a cut from the already record low of 0.5% to 0.25%. This is common knowledge so I would not expect a huge fall in Sterling value as the cut is probably already factored into the market. What could cause a significant fall is if Mark Carney the Governor of the BOE announces Quantitative Easing (QE). QE is essentially pumping money into an economy in order to stimulate growth. Carney has £150bn at his disposal and if QE is implemented expect Sterling to drop in value.
If you are buying AUD, why not wait until after the RBA decision on 2nd August and then trade before 4th August BOE decision.
If you have a currency trade it is vital to be in touch with an experienced broker. The timing of your trade is key during such a volatile times, If you have a veteran broker on board he can keep you up to date with what is happening in the market to help you make an informed decision. If you would like me to help with your trade I will be happy to help. Let me know the currency pair you are trading, volume and time scale and I will provide a free trading strategy to suit your needs. I work for one of the top brokerages in the UK and as such I am in a position to beat nearly every competitors rate of exchange. You would be looking at around a 4% saving in comparison to high street banks. Please do get in touch by contacting me at [email protected]. Thank you for reading my blog and I look forward to hearing from you.