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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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EURAUD Provides Volatility Opportunity

EUR v AUD is feared by inflation numbers that could affect the price over the next two days. 

The euro is looking to hold the 1.5400 support level but is facing core inflation numbers and Q3 GDP on Monday. That will be followed by an RBA rate hike decision ahead of Tuesday’s session. 

EURAUD – Daily Chart

euraud daily chart

The latest European inflation number is the core rate for October, with an expected 0.1% rise to the 4.9% level. The first estimates for GDP Q3 growth in the Eurozone are for a 0.2% quarterly GDP number. If inflation is higher or GDP is lower, the euro could drop against the Aussie dollar. 

Ahead of Tuesday’s Asian session, the Reserve Bank of Australia is expected to raise rates by another 0.25% to 2.85%. 

However, some analysts predict a 0.50% rate hike on Melbourne Cup day, when the country stands still to watch one of global horse racing’s most significant events. 

Westpac Bank expects another 50 bps increase in the lending rate, but HSBC analyst, Paul Bloxham, disagrees. “I don’t think they will lift again in 50-basis point increments,” he said, adding that it would get “more complicated” after because the next meeting would be in February. 

Westpac said: “Wednesday’s higher-than-expected inflation figures might have thrown a spanner in the works. However, it’s unlikely to be enough to throw the RBA off course entirely.” 

“While it’s more likely the Board will stick with a standard quarter of a percentage point hike, the option of a double hike is very much a live one.” 

“The global economy will start to rapidly slow by that point.” 

Europe has been getting closer to a recession. The European Central Bank (ECB) raised interest rates to 1.5% last week, making borrowing and debt repayments more expensive. The ECB lifted its own interest rate after the latest inflation rate came in at 9.9%. 

Macquarie Group said: “The sharply downgraded growth forecasts the ECB released just last month already look out of date and too optimistic ... We expect the ECB will likely raise rates by another 100 bps in the next few months, pushing policy firmly into restrictive territory.” 

The EURAUD pair should see volatility into Tuesday, which will determine the exchange rate path for the rest of the week.

Last Updated: 31/10/2022

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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