Market Brief 5 September: Interest Rate Decision from Australia
There are three major events on the calendar today, two of which on the early hours of the day.
AUD 05:30 a.m. GMT + 1, RBA Interest Rate Decision (Sep) – interest rate decisions provide significant levels of volatility for the markets as their impact is long-term and affects directly the monetary policy of the country. Market analysts foresee no changes in the rates and thus projections are at 1.50%, same as last time. In case there is a change of the decision that comes out, this will stir up the markets. If there is a cut to the rate, this should influence the Australian dollar negatively. And, if the change results in an actual increase in the interest rate, this should send the currency higher (and in line with the established bullish movement).
AUD 05:30 a.m. GMT +1, RBA Rate Statement – the statement contains details of the interest rate decision result and the economic conditions that contributed to the outcome. Investors pay close attention to the statement as it can give clues as to future developments and following decisions by the Reserve Bank of Australia.
09:30 a.m. GMT + 1, Services PMI (Aug) – the Services Purchasing Managers’Index is a key indicator of the levels of activity of purchasing managers in the service sector. 50 is the level that determines whether the sector is expanding (when above 50) or contracting (below 50). Projections for the month of August point to a minor decrease at 53.5 compared to 53.8 for the previous period. If the reading is higher than expectations, this should boost the value of the cable. And, conversely, if the result shows a striking weakness from expectations, this should be taken as a bearish sign for the pound.
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