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DAY 10 - RBNZ MONETARY POLICY ANNOUNCEMENT

The most important event risk on the calendar this week is the Reserve Bank of New Zealand’s monetary policy announcement. Having raised interest rates at the last 2 meetings, the RBNZ is the world’s most hawkish central bank and 85% of the economists surveyed by Bloomberg expect the central bank to raise rates for the third time in a row. However I believe rates will remain unchanged and this discrepancy is where I see the opportunity to sell the NZD/USD.
Since the last monetary policy meetin…
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DAY 7 - GBP moves wait for BoE Interest Rate Decision

The USD dropped against GBP yesterday as the pair reached its highest level in three years and hit 1.70 level. The catalyst for this 130 pips bullish move was due to stronger than expected U.K. Services PMI which edged higher to 58.7 in April compare to 57.6 in March. The latest upbeat survey points to a buoyant economy (the service sector accounts for +75% of the British economy) confirming the fastest pace so far this year, while jobs growth across the private sector also surged, as evident fr…
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Preview ECB Interest Rate Decision & Press Conference

The ECB meets on Thursday amid heightened speculation it will make a new initiative given the deterioration of the two pillars of its monetary policy, money supply and inflation. Most observers have focused on cutting the repo rate 10-25 bp. Others have raised the prospect of a negative deposit rate. Some have also suggested the formal end to the sterilization of the SMP purchases, which involves draining of liquidity. In recent weeks, there has been a noticeable increase in failures to fully
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Daytrader21 avatar

My personal opinion is that any cut in interest rates is off the table at tomorrow meeting. It will be all about Mario's rhetoric and ECB forward guidance. He may be dovish as Europe face the threat of deflation

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EURUSD PRICE ACTION AFTER ECB PRESS CONFERENCE

EUR/USD dropped to a fresh 1 month low on the back of Draghi’s comments. However the currency pair has not extended its losses beyond 1.3548 (so far) because Mario Draghi did not suggest the central bank has grown more serious about moving into uncharted territory by dropping interest rates below zero. All policy tools are at their disposal and they stand ready to act if needed but right now they are comfortable with the current level of monetary policy. We have already seen almost 75% retrace…
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