Highly profitable currencies
After the publication of data on Australia's GDP, the prices of the Australian dollar did not undergo significant changes. At the last meeting of the Reserve Bank of Australia, it decided to leave the interest rate at its previous level, which was expected by the market, and, as always, the most interesting takeaways followed in the comments of the RBA, which accompanied this decision. The RBA noted that the current interest rate is at a balanced level, which on the one hand supports the economy, but, on the other hand, helps to contain inflation. It should be noted that the RBA somewhat softened the view of the relatively high exchange rate of the national currency, and, at the moment, found positive aspects of the current exchange rate, noting it as a contribution to the fight against inflation.
It turns out that the rate of the AUD/USD currency pair at 0.80 seems to satisfy the RBA, and on its part, decisive action that is able to move the course of the pair strongly seems unlikely. However, the local maximum in the pair AUD/USD is almost reached, and allowing an early correction in the dollar index, you can search for entry points into a short position for the Australian currency.
The Bank of Canada's key rate on overnight loans will be published today, followed by comments from BoC. The economy of Canada is on the rise showing GDP growth in the second quarter of more than 4%. Along with the growing GDP of Canada, consumer demand is growing rapidly, and the market sees a raise in the rate by the Bank of Canada as a possible option. With this development, the US dollar will collapse by several percent against the Canadian dollar, BoC's positive comments will pour fuel on the fire, and it is likely that the pair will come close to 1.20 mark. Yet such a scenario is difficult to fit into the global trend, which prevails in the policies of world central banks. Having taken this step, the Bank of Canada will significantly strengthen the revaluation of the national currency, which may in turn worsen export trade performance for Canada.
What would the Bank of Canada prefer: to be a conductor of a hawkish policy or to passively to stand aside, while retaining the possibility of manoeuvre at a more appropriate moment in time. Today, this is the main intrigue of the day.
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