We bring you another short summary of economic events that have affected our trading
during the last trading week.
Last week was again marked by interest rates. The decision to change interest rates was offered by Australia on Tuesday and New Zealand the day after. This type of economic indicator is one of the most important for us to track. In general, a higher than expected (previous) interest rate is bullish for a given currency. On the other hand, the lower one has a bearish character.
AUD
As I mentioned above, on Tuesday Australia offered us a decision on interest rates, which as expected remained unchanged (0.10%). According to Reuters, the goals are clear: maintain the money rate target at 10 basis points and continue buying $4 billion of government securities per week until at least mid-February 2022. The central scenario says that the conditions for a rate hike will not be met before 2024.
EUR
On the same day we were impressed by the speech of the President of the European Central Bank (ECB) - Christine Lagarde, who reacted to the lack of supply and the rising price of energy. Lagarde noted that these phenomena cannot be influenced too much by our monetary policy, so we should not overreact to them. However, it will continue to pay close attention to the evolution of wage inflation expectations to ensure anchoring at 2%.
NZD
On Wednesday, the Reserve Bank of New Zealand raised its official cash rate from 0.25% to 0.5%. Further removal of monetary policy stimulus is expected over time. Furthermore, headline CPI inflation was expected to rise above 4% in the near future. This should be positive news for the NZD in the long term.
What's in store for the current trading week?
This week we will focus our attention mainly on the GDP results in the UK and Thursday's
employment change in Australia.
Sources:
https://www.forexlive.com/
RBA Gov Lowe: https://www.forexlive.com/
