Apr 5th 2016: RBA Holds Rates For Now

• This morning, the RBA kept rates on hold at 2.00% as expected, but a widening trade balance deficit opens up the door for cuts in the future. The Aussie is experiencing minor selling this morning, but the New Zealand dollar is experiencing some follow on selling after yesterday’s plunge.

• The yen pairs are experiencing the biggest movements so far, with the USD/ JPY extending its recent losing run.

• Meanwhile sinking oil prices are helping the US dollar to keep the sellers at bay.

Coming up today:

• Coming up today we have German factory orders at 07.00.
• Following this we have a series of lower tier European services PMI data points.
• Then at 09.30 we have UK services PMI.
• From 13.30, we switch to Canada and US for trade balance.
• US ISM non manufacturing PMI follows at 15.00, with JOLTS job openings at the same time.

Trade Idea: 

• The GBP/ JPY continues to struggle and could have further to fall if the Brexit uncertainty continues to weigh on the pound alongside a generally meek economy.

• A good way to play this is a LOWER trade predicting that the GBP/ JPY will close below 156.00 in 14 days for a potential return of 217%.

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