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USD Range Trading. Reserve Bank Of Australia Dovish

John M. Bland, MBA, co-founder,

EURUSD Trading In Ranges Summer markets this year have been unusually thin. The EURUSD pair has been in a rough 1.15 to 1.1650 range with daily price ranges in between excessively choppy due to seasonal illiquidity. The GBPUSD and EURGBP pairs have been volatile as well due to ongoing Brexit discussions and wildly differing wire headlines. Markets should return to near normal liquidity conditions in the second half of August.

Reserve Bank Of Australia Leaves Cash Rate Target At 1.75%, As Expected The Reserve Bank Of Australia kept its key Cash Rate target unchanged at 1.50%, as widely expected. It was a dovish decision as Governor Lowe tweaked the outlook for inflation lower. He said that the RBA expects that the CPI in 2018 is likely to be lower than previously forecast at 1.75%, below the 2%-3% target band. However. at the same time, it expects inflation rising more than previously forecast in 2019 and 2020.

Policy is being driven by stubbornly low inflation, record high household debt, a slack labor market and falling house prices. The Street is now expecting that the RBA Cash Rate target to remain steady at least until January 2020. As for the economy, the RBA said “The Bank's central forecast for the Australian economy remains unchanged. GDP growth is expected to average a bit above 3 per cent in 2018 and 2019. This should see some further reduction in spare capacity. Business conditions are positive and non-mining business investment is continuing to increase. Higher levels of public infrastructure investment are also supporting the economy, as is growth in resource exports. One continuing source of uncertainty is the outlook for household consumption. Household income has been growing slowly and debt levels are high. The drought has led to difficult conditions in parts of the farm sector.”

“Australia's terms of trade have increased over the past couple of years due to rises in some commodity prices. While the terms of trade are expected to decline over time, they are likely to stay at a relatively high level. The Australian dollar remains within the range that it has been in over the past two years.”

GVI Trading. Potential Price Risk Scale

AA: Major, A: High, B: Medium

Mon 13 Aug 2018

Tue 14 Aug 2018

AA 08:30 GB- Employment

A 09:30 DE- ZEW Survey

Wed 15 Aug 2018

AA 08:30 GB- CPI

AA 12:30 US- Retail Sales

A 12:30 US- Productivity

A 13:15 US- Industrial Production

A 15:30 US- EIA Crude

Thu 16 Aug 2018

A 01:30 AU-Employment

AA 08:30 GB- Retail Sales

A 12:30 US- House Permits

A 12:30 US- Philly Fed

A 12:30 US- Weekly Jobless

Fri 17 Aug 2018

A 09:00 EZ- Final HICP

AA 08:30 CA- CPI

AA 14:00 US- Final University Of Michigan

A 14:00 US- Leading Indicators

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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