Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.
Event: RBA Interest Rate Decision
Date: Tuesday 06 June 2017 at 04:30 GMT
Markets affected: AUD /USD, EUR/AUD
Trending hashtags: #aussie, #rba, #aud
The Reserve Bank of Australia kept the interest rate at 1.5% where it’s been since August 2016. This is a record low for Australia after the RBA cut rates twice last year on the back of the lowest inflation figures for 17 years. The AUD steadied with little change on the news and traded in a narrow range overnight. What did give the AUD/USD some price action was the release of positive GDP growth figures. The Australian economy grew by 0.3% in the first quarter of 2017, 0.1% above the forecast. The government is now predicting GDP to grow by 1.75% in 2017.
Event: Eurozone GDP Q1
Date: Wednesday 07 June 2017 at 09:00 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #eur, #gdp
Eurozone GDP grew 0.6% in the first quarter of 2017, coming in higher than the initial estimate of 0.5%. Eurostat reported the figures on Wednesday and showed an annualized increase of 1.9%. The common currency, the euro fell as economists boosted their outlook for the region’s GDP.
Event: UK Elections
Date: Thursday 08 June 2017
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #elections, #footsie, #gbp
Election results continue to come in as of writing but the BBC predicts that the Conservative party may not reach the majority needed to confidently lead the nation into a Brexit. Prime Minister Theresa May could have a crisis of legitimacy as the Tories are projected to win only 318 seats, far worse than the party’s performance under David Cameron. The Sterling collapsed as the preliminary election results came in, falling 250 pips and hitting below 1.28 for the first time since April.
Event: ECB Interest Rate Decision
Date: Thursday 08 June 2017 at 11:45 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #eur, #interestrate
The European Central Bank voted kept the interest rate at a low 0% with the deposit rate also unchanged at -0.4%. No one was taken by surprise as the ECB maintained the status quo on its monetary policy steady on Thursday.
Trade of the Week
Time in: Thursday 08 June 2017 at 21:00 GMT
Investment: $500 with 200:1 leverage
Time out: Thursday 08 June 2017 at 21:05 GMT
If you had sold the GBP/USD with a $500 margin at the price of 1.29563 and closed the deal during the UK elections on Tuesday just after 5 minutes later which saw the GBP fall 1.79%, you might have more than doubled your investment with a tidy $1,792 profit. Note this example does not take into account spread.
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