Forex Investment and Currency Trading

The AUD has appreciated strongly in conjunction with the rally in stocks. Indeed the Aussie has outperformed all the other majors since March 9th, supporting the trade idea of long recommendation in AUD/JPY.
Last week brought a string of positive data surprises. Retail sales continued to surprise on the upside helped primarily by the fiscal boost from the government and the rapid flow through of easier monetary policy. The housing market is showing signs of life given the pick up in building and mortgage approvals, although house prices are continuing to fall. Finally, Australia’s external balance has improved due to the [...]

[Read more →]

Tonight is the Reserve Bank of New Zealand’s Official Cash Rate (OCR) decision. It being an OCR Review there will only be a statement issued to explain the rate decision but no update of the forecasts.
Market expectation is for a 50 basis point cut with a dovish statement. Central banks around the world are announcing their predilection towards holding rates lower for longer. Canada, the Riksbank and ECB officials have all made statements to this effect and we will look to see if the RBNZ follow this trend. Announcing a reluctance to raise rates in the future is a verbal [...]

[Read more →]

Reserve Bank of Australia surprises with 25bp rate cut to 3.00% – likely to pause for a number of months
The Reserve Bank announced a 25 bp cut following it’s overnight Board meeting. For the last month some market analysts have argued that the Bank was likely to keep rates on hold for a number of months to assess the impact of the recent aggressive rate cuts and substantial fiscal stimulus packages which are being implemented by the Government. The other argument in favour of a pause was to allow the Bank to conserve some flexibility to deal with potential further [...]

[Read more →]

The Reserve Bank of New Zealand ease monetary policy by 50 basis points this afternoon, and as a result the NZD has rallied about 1%. Some in the market were looking for a 100 basis point cut. The following story covers this announcement well. This should be seen as an opportunity to sell NZD in the medium term.
By Tracy Withers
March 12 (Bloomberg) — New Zealand’s central bank cut its benchmark interest rate by half a percentage point to a record-low 3 percent to help steer the economy out of it worst recession in more than 30 years. “The combined effects [...]

[Read more →]