🦘Australian Rate Hikes vs European Risks Worsening 🔥💤

2022年7月5日

Australia’s central bank hikes interest rates for the third month in a row.

AUD KEY POINTS:
Wrapping up its July policy meeting, the Reserve Bank of Australia lifted its cash rate by 50 basis points to 1.35%, marking 125 basis points of hikes since May and the fastest series of moves since 1994.
“The Board expects to take further steps in the process of normalizing monetary conditions in Australia over the months ahead,” said RBA Governor Philip Lowe in a statement.
The hike was widely expected in markets and the local dollar eased slightly in reaction to $0.6863 while futures narrowed the odds on another half-point hike in August.

EUR KEY POINTS:
Euro plunges to two-decade low vs dollar:

As expected and as mentioned here one too many times. Since our perfect short on EURUSD at 1.23
No surprise as we even called for parity more recently .
It will continue to be very difficult for the euro to rally in any meaningful way with the energy picture worsening and risks to economic growth increasing notably. Europe will pay the main bill for Ukraine!
Survey data showed business growth across the euro zone slowed further last month and forward-looking indicators suggested the region could slip into decline this quarter as the cost of living crisis keeps consumers wary.

Not to mention that if Biden indeed eases tensions with China, Australia could benefit greatly.

Definition of a Forex trade here and unlike EURUSD leaving less room for profit, EURAUD looks great.

One Love,

the FXPROFESSOR