As the Reserve Bank of Australia prepares to make a decision on interest rates at next week’s policy meeting, traders are taking into consideration the most data which reinforces analysts’ expectations of a rate cut. Earlier today, the Australian Bureau of Statistics released its PPI readings for the first quarter of the year, and readings were exceedingly below forecasts. As compared to the last quarter of 2011, the reading fell to -0.3% from 0.3%, while analysts had forecast a rise to 0.4%; as compared to the same period a year ago, the data on input inflation shows a decline to 1.4% from 2.9%, well below 2.2% expectations. Any lingering concerns that inflation could be a concern can clearly now be dismissed.
The AUD/USD is likely to continue consolidating and analysts recommend short positions with a target at 1.03, and then further out at 1.0275. The pair is currently trading just off the day’s low at 1.0331 and sentiment on OpenBook is predominantly bullish, and quite a few of OpenBook’s traders, including guru sadiqashanaz97, are putting in orders to buy at 1.027 and below. Guru sadiqashanaz97 has a well-diversified portfolio and holds a 10.2% allocation in the Aussie-Dollar which has provided a 2.1% gain in the past month.
OpenBook trader rowaihy has traditionally allocated the majority of his portfolio to the AUD/USD, and in the past week has been trading the pair exclusively for a 13.5% gain. Earlier today, he closed out a short position with a 23.38% gain and has another half dozen shorts all of which are currently green, all with profits which range from 16% to nearly 28%. As of this writing, this trader has 251 followers and 67 copiers, and his monthly and quarterly P&L are 50.9% and 51.8%, respectively.
China’s flash PMI Manufacturing reading for April was also released earlier today, and though it reflects a rise to 49.1 from 48.3, it still falls below the 50.0 threshold which separates contraction from expansion within the sector. Markets are expecting the Chinese government to hasten the pace of easing to minimize the economic slowdown which detrimentally affects China as well as a great many inter-related economies including Australia’s.
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