This week will bring a lot of fundamental news that will cause market fluctuations and create excellent trading opportunities for traders. We identified 3 main events of this week:
1. The Reserve Bank of Australia will release their Cash Rate and Rate Statement on Tuesday. The interest rate charged for the transfer of overnight transactions between financial companies, according to preliminary forecasts, will remain unchanged: 1.50%. Such a result is laid in market prices, therefore any surprises will lead to fluctuations in the national currency rate: the rate hike will help the Australian dollar to grow, and the reduction will help it to fall. The decision on the interest rate will indicate the views and concerns of the RBA.
A more decisive nature of the report will lead to an increase in the AUD rate, while a weaker one will lead to a decrease.
2. On Thursday, parliamentary elections will be held in Britain: British citizens will come to polling stations and cast their votes in favor of the Conservative or Labor Party. A victory in the election will give the party-leader a carte blanche in the decision-making on the Brexit procedure, as the long process of negotiations on Britain’s withdrawal from the EU begins. The last fall in the pound sterling was due to news that the Conservative Party was losing its majority. Proceeding from this, it is not difficult to assume that the British hope for the victory of this particular party. Consequently, if the Labor Party wins, the pound’s rate may be under strong pressure.
3. Among other important events on Thursday, mention should be made of the publication of the EC Interest Rate Decision and Press Conference. Since the interest rate is expected to be unchanged at 0%, all attention will be focused precisely on the press conference. Market participants hope to understand the views of the bank’s representatives on the current and future state of the European economy. ECB President Mario Draghi will probably retain his restrained position, and any mention of further easing will surely contribute to the fall of the euro. If Draghi takes a more decisive tone and notes that the ECB has reasons for maintaining the current monetary policy, the euro’s rate will rise.