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The vast majority of retail client accounts lose money when trading CFDs.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Australian Dollar Can Gain Ground Against the Euro with Data

EURAUD trades under the 1.47 level and could gain some further ground on the downside with economic data released this week.euraud chart

EURAUD 4 Hour Chart

Tuesday brings the release of Westpac Consumer Confidence before the Eurozone and German ZEW economic sentiment indexes. Thursday will bring employment figures for Australia, with predictions for a gain of 50k jobs.

The employment market is a big driver of monetary policy decisions by the Reserve Bank of Australia and some unemployment could see them hesitate on their rate hike path.

Westpac Bank’s Chief Economist, Bill Evans, thinks the RBA is deliberately trying to slow the economy to get inflation out of the system. That means households stop spending as their disposable income drops.

"The channels for flattening growth in demand include a very large negative wealth effect as house prices tumble, restricted growth in household disposable income as interest rates increase, record low consumer confidence, and increased borrowing costs for businesses," Mr. Evans wrote.

"We think that the objective will be achieved by steadily increasing the cash rate to 3.35% by early 2023, with GDP growth eventually slowing to around 1% in 2023." 

The Australian dollar will benefit from the European Central Bank’s slower pace on rates, and sources close to the ECB were quoted with a 2% target for European rates to tame inflation. They added that the bank was bracing for a recession this winter and weaker growth next year than the ECB‘s own projection of 0.9%. However, a strong labour market is expected to cushion the economy from higher rates.

The Australian dollar was sold off as EURAUD reached highs near 1.49. The euro appears to have peaked at those levels, and with winter approaching in the Eurozone, this could be a good time to go short on EURAUD.

Last Updated: 12/09/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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