Antipodean currency volatility expected as the RBA and RBNZ decide on rates
Traders and investors will digest the outcome of the United States monthly job report on Monday, ahead another busy week of macroeconomic data releases. The Reserve Bank of Australia and the Reserve Bank of New Zealand both decide on interest rates this week, with both central banks promising to deliver currency volatility. The RBA is expected to keep monetary policy unchanged after recently embarking on interest rate cuts, while the RBNZ is widely tipped to cut interest rates by twenty-five basis points.
This week we also see a raft of important PMI services data from the Japanese, UK, eurozone and United States economy. The UK economy also releases the first preliminary reading of the second quarter UK GDP report, which is expected to show a slowdown in growth from the first quarter of 2019. Traders also look to Japanese GDP numbers and the release of the Canadian monthly jobs report.
Monday 5th August, GBP UK Services PMI
The United Kingdom Services PMI is released by both the Chartered Institute of Purchasing and Supply and also Markit Economics. The UK Services PMI is a key indicator of the economic situation in the UK services sector which captures an overview of the condition of sales and employment. It is worth noting that the United Kingdom service sector comprises roughly eighty percent of the United Kingdom’s gross domestic product.
- The GBPUSD pair is bearish while trading below the 1.2250 level, key support is found at the 1.2080 and 1.2000 levels.
- If the GBPUSD pair trades above the 1.2250 level, buyers are likely to test towards the 1.2310 and 1.2350 resistance levels.
Tuesday 6th August, AUD, RBA Rate Decision
The Reserve Bank of Australia Rate Decision is the market interest rate on overnight funds, with the RBA standing as the central monetary authority for the Australian economy. The Reserve Bank of Australia is widely expected to keep the nations interest rate on-hold at 1.00 percent at this meeting and strike an overall dovish tone towards the economy and future monetary policy.
- The AUDUSD pair is only bullish while trading above the 0.6900 level, key resistance is found at the 0.6935 and 0.6960 levels.
- If the AUDUSD pair moves below the 0.6900 level, sellers may test towards the 0.6750 and 0.6660 levels.
Wednesday 7th August, RBNZ Rate Decision
The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand and is usually scheduled over a six-week period. After previously reducing rates by twenty-five basis points to 1.25 percent, the RBNZ is expected to cut interest rates yet again and strike a dovish tone towards the New Zealand economy. If the RBNZ is hawkish about the inflationary outlook of the economy is may be taken as bullish for the New Zealand dollar.
- The NZDUSD pair is bearish while trading below the 0.6590 level, key support is found at the 0.6500 and 0.6450 levels.
- If the NZDPUSD pair trades above the 0.6590 level, buyers are likely to test towards the 0.6650 and 0.6685 resistance levels.
Thursday 8th August, CNH Chinese Exports
Chinese exports data is released by the National Bureau Statistics of China and measures the total transactions in goods and services from residents to non-residents. Chinese export data is generally considered to be a measure of the overall health of the Chinese economy. Weaker than expected export data may point to a weakening Chinese economy, as trade tariffs from the Trump administration impact manufacturing and factories in the world’s second-largest economy.
- The USDJPY pair is bearish while trading below the 107.50 level, further losses towards the 106.10 and 105.20 levels remains possible.
- If the USDJPY pair trades above the 107.50 level, buyers are likely to test towards the 107.80 and 108.10 resistance levels.
Friday 9th August, GBP UK Q2 Gross Domestic Product
UK Gross Domestic Product is released by the Office of National Statistics and is a measure of the total value of all goods and services produced by the UK. UK GDP is considered as a broad measure of the UK economic activity that many economists and investors pay attention to. Worse than expected UK GDP data is considered bearish for the British pound, while better than expected GDP data should support strength in the British currency.
- The EURGBP pair is only bearish while trading below the 0.9150 level, further losses towards the 0.9110 and 0.9080 levels remains possible.
- If the EURGBP pair trades above the 0.9150 level, buyers are likely to test the 0.9200 and 0.9300 resistance levels.