Fundamental Freddie Weekly Report – 03-Feb-13

Next week it’s Interest rate decision time for the Australian Dollar (Tuesday), British Pound (Thursday) & the Euro (Thursday too).

The British Pound and the Euro Interest rate decisions, both due on Thursday (within an hour of each other), are highly unlikely to surprise.  The wide market expectation is that both will remain as is, 0.50% and 0.75% respectively.

The Australian Dollar (AUD) Interest rate decision due on Tuesday morning is however a slightly different story. The general expectation is that the rate will be left as is (at 3.00%) but some are already pricing in a cut – To steady the currencies recent strength. Expect much volatility around this announcement and be careful if holding overnight positions (on Monday).

[notify_box font_size=”13px” style=”blue”]Interest rate decisions where there is a high expectation of no change rarely excite. However, when there is room for doubt (like AUD this week) one can expect volatility even if the rate remains unchanged.[/notify_box]

Those trading GBP and the FTSE should also be alert on Thursday around midday when the Bank of England announces it’s Asset Purchase update. Any indication of an easing (although unlikely just yet) on this liquidity would spook markets.

This Weeks News

As always, here is a list of the major news events for the week ahead (source = Forex Factory):

Fundamental Freddie - 2013-02-03 - Calendar

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