In an effort to drive down the looming inflation that is eroding the currency purchasing power and to keep the Australian dollar strengthened, the Reserve Bank of Australia has kept the interest rate high at 3.6%. The increment was done for the 10th consecutive rise. According to an economic analyst, the rate is anticipated to rise further to 3.85%.
However, as economic growth slows and the speculation for the unemployment rate increases, the interest rate hike is likely approaching its peak level. Also, the Gross Domestic Product is anticipated to slow in 2023.
At the time of writing this publication, the Australian dollar index sits at 66.89 and it is rallying to gain momentum for a rise off the support zone. This could possibly be a catalyst for a massive gain in AUD/USD pair by more than 800 pips as the interest rate remained elevated.
The chart of the Australian Dollar Index.
Regardless, traders should brace themselves up for a period of high volatility as the Cash Rate report often have a great impact on the FOREX market.
An increase in Cash Rate will usually strengthen the AUD (Aussie Dollar), while its decrease will usually weaken the AUD (Australian Dollar).
Traders should always be aware that volatile markets provide great opportunities for making profits, as the increase in volatility can cause market swings for traders to capitalize on.
Traders can take advantage of the volatility presented by the Australian Cash Rate release by trading currency pairs that include AUD (Australian dollar). They AUDUSD, AUDCAD, AUDCHF, AUDJPY, AUDNZD, etc.
Time Schedule for the next Australian Cash Rate Report:
Date: Tuesday April 4th, 2023.
Time: 5:30am (GMT + 1)
Recent Comments