Forex Signal (Tuesday August 2, 2011, 12:30am NY Time EDT) - AU RBA Interest Rate

[Stavro D'Amore]

RBA (Reserve Bank of Australia) is expected to keep borrowing costs unchanged at 4.75%, as per the wide market consensus…

Here is the forecast for this news release:

12:30am (NY Time) AU RBA Rate Decision Forecast 4.75% Previous 4.75%
ACTION: AUD/USD BUY 5.00%

The Trade Plan
If RBA increases interest rates, we should jump in (spike trade) and buy AUDUSD or other AUD crosses. At the present moment, the expectation for a rate hike is one of this year's greatest guessing games, with current pressure from the government’s new carbon tax, Queensland’s flood disaster and an overall pull back in the housing market of 10-15%. We could also see rates on hold; however in saying this, the RBA strongly believes that the appropriate target for the Australian cash rate should be 5.45%, this could also mean that we will see 3 further rate increases by this time next year.

If the RBA decides to keep rates unchanged, we may see a sell-off, as the accompanied RBA statement may be dovish in light of recent news events.


For more information on my trading methods, read:
Stavro D’Amore Trading Method

The Market
Most likely the RBA will keep rates unchanged at 4.75%, should the rate rise to 5.00%, we will see AUD/USD taken to highs of 1.100.
On the other hand, we have the US debt crisis and the woes of the European debt crisis which will continue so the RBA may continue to hold off its official rate increase until further improvement.

Also understand that recent AUD strength has taken a significant toll on the Australian economy applying significant pressure on the tourism and travel industry. It has also placed pressure on the retail sector, as many consumers are going online and purchasing consumer goods with a stronger AUD.

Additional Thoughts
Governor Stevens is likely to keep rates unchanged, this time. Fundamentally, with the AUD appreciating to the highest levels in decades, it offsets any inflationary pressure.

Pre-Market Consideration
There will be no pre-news trading today.

Historical Data & Chart for RBA Interest Rate

All The best


Stavro D’Amore

 

[gibson]

hello Stavro D'Amore

Please, I need more general information on trading Interest rate. How do i know when to buy or sell when both the Forecast and the Actual are the same?

for instance if the forecast for AUD cash rate is 4.75 and the Actual is 4.75, are we suppose to buy or sell...somebody help explain more please.

thanks Stavro D'Amore

 

[digamer]

Please, I need more general information on trading Interest rate. How do i know when to buy or sell when both the Forecast and the Actual are the same?

for instance if the forecast for AUD cash rate is 4.75 and the Actual is 4.75, are we suppose to buy or sell...somebody help explain more please.

thanks Stavro D'Amore

From the original post: "If the RBA decides to keep rates unchanged, we may see a sell-off, as the accompanied RBA statement may be dovish in light of recent news events."

 

[DJG]

Good day Stavro ,

can you please explain how to use pending orders properly to trade the news ? i know how to set a pending order i am just not sure how to do it for news trading without the volatility triggering the order before the news , if i set it too far then the order might get triggered at the tip of the spike :err:

thanks Stavro

 

[MBPAC94]

signals

forgive my newbie ignorance but where do I go to find the signals once released?

 

[Stavro D'Amore]

forgive my newbie ignorance but where do I go to find the signals once released?

You can check the FPA callender