Aussie Rallies on Potential Rate Hike

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Today’s sample of Forex ####ysis from ForexHound.com

The AUD USD posted a strong gain on Wednesday following the news that the Australian economy grew more than expected. The report showed that Aussie GDP was up 0.6%. Traders attributed this gain to the positive influence from government stimulus that encouraged consumer spending. The rally could continue tomorrow as investors may begin to price in the possibility of a rate hike at the next central bank meeting on October 6.

News that the Australian economy was growing along with generally weak U.S. equity markets helped keep pressure on the NZD USD throughout the day. A break in U.S. stock markets could trigger weakness in the New Zealand Dollar if demand drops from higher yielding assets.

Oversold technical factors helped boost the GBP USD on Wednesday. Trading was thin as most major players remained on the sidelines ahead of this Friday’s U.S. Nonfarm Payrolls Report. Fundamentally, yesterday’s decline in U.K. manufacturing sent a signal that the economy is still contracting. This means that the Bank of England is not likely to announce an ending to its quantitative easing program at its next meeting on September 10th.

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