Henry Liu
Former FPA Special Consultant
- Messages
- 473
RBA (Reserve Bank of Australia) is expected to keep borrowing costs unchanged, as all 25 analysts agree in a survey by Bloomberg… Here’s forecast:
10:30pm (NY Time) AU RBA Rate Decision Forecast 4.75% Previous 4.75%
ACTION: AUD/USD BUY 5.00%
The Trade Plan
If RBA hikes rates, we should jump in (spike trade) and buy AUDUSD or other AUD crosses as the expectation for a rate hike is less than 1%. If RBA decides to keep rates unchanged, we may a sell-off as the accompanied RBA statement may be dovish in light of recent news events.
Important Note: The only time I'd recommend a spike trade is when there are so much momentum pushing this currency that regardless of spread and slippage, you should end up in profit if you just hold on to the trade. For more information on my trading methods, read:
Henry's News Trading Method.
The Market
All 25 analysts (surveyed by Bloomberg) agree that RBA will keep rates unchanged. As a matter of fact, there is only about 57 basis point of rate hike currently priced in by the Sydney Exchange for the next 12 months.
Governor Stevens is likely to keep rates unchanged until the 3rd quarter of 2011, as RBA allows growth over price inflation in order to recover from flooding and cyclones.
Additional Thoughts
I'll be looking for decline in the AUDUSD immediately following RBA's statements. I would probably expect some dovish statement to justify the pause for time being.
Pre-Market Consideration
There will be no pre-news trading today. But if I were to pick a direction, I would be selling AUD.
Historical Chart & Data For RBA Interest Rate Decision
Thanks,
10:30pm (NY Time) AU RBA Rate Decision Forecast 4.75% Previous 4.75%
ACTION: AUD/USD BUY 5.00%
The Trade Plan
If RBA hikes rates, we should jump in (spike trade) and buy AUDUSD or other AUD crosses as the expectation for a rate hike is less than 1%. If RBA decides to keep rates unchanged, we may a sell-off as the accompanied RBA statement may be dovish in light of recent news events.
Important Note: The only time I'd recommend a spike trade is when there are so much momentum pushing this currency that regardless of spread and slippage, you should end up in profit if you just hold on to the trade. For more information on my trading methods, read:
Henry's News Trading Method.
The Market
All 25 analysts (surveyed by Bloomberg) agree that RBA will keep rates unchanged. As a matter of fact, there is only about 57 basis point of rate hike currently priced in by the Sydney Exchange for the next 12 months.
Governor Stevens is likely to keep rates unchanged until the 3rd quarter of 2011, as RBA allows growth over price inflation in order to recover from flooding and cyclones.
Additional Thoughts
I'll be looking for decline in the AUDUSD immediately following RBA's statements. I would probably expect some dovish statement to justify the pause for time being.
Pre-Market Consideration
There will be no pre-news trading today. But if I were to pick a direction, I would be selling AUD.
Historical Chart & Data For RBA Interest Rate Decision
Thanks,
Last edited by a moderator:
