I'm going to take a small gamble (aren't I not supposed to do this?)...consensus strongly agrees that RBA will cut rates today, and I just don't see it. Inflation is stable and will recover as oil prices do (the 1.3% was lower due to oil and ore prices that have since rebounded somewhat), employment is improving (even if only modestly), and AUD/USD is below .80. I don't think Stevens sees it either: he made some comments suggesting as much a few days ago, and the last few years have shown that he's not much of a dove.
Reasons I'm ok making a small gamble with low leverage on a short term trade:
1) There doesn't seem to be a need to cut rates right now, 2) economists have called RBA rate decisions wrong the last few months, 3) the rate cut is priced in, so if it goes wrong, the damage won't be too bad but the upside will be far greater.
I'm closing this trade out within a day, one way or another.
Long June '15 6A (AUD/USD) @ 78.24
Update:
Bet didn't pay off, but it was small risk, high reward, and I'll take those all day. Closed @ 77.84, loss of 4%.
Update2:
And of course, I exit way too soon. Just spiked over 78.84, not sure why, the statement wasn't hawkish, it just wasn't dovish. In fact, it said "The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices."
Reasons I'm ok making a small gamble with low leverage on a short term trade:
1) There doesn't seem to be a need to cut rates right now, 2) economists have called RBA rate decisions wrong the last few months, 3) the rate cut is priced in, so if it goes wrong, the damage won't be too bad but the upside will be far greater.
I'm closing this trade out within a day, one way or another.
Long June '15 6A (AUD/USD) @ 78.24
Update:
Bet didn't pay off, but it was small risk, high reward, and I'll take those all day. Closed @ 77.84, loss of 4%.
Update2:
And of course, I exit way too soon. Just spiked over 78.84, not sure why, the statement wasn't hawkish, it just wasn't dovish. In fact, it said "The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices."
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