Aussie Slumps on Rate Cut

Morning Report: 06.30 London

• This morning, the Australian dollar is under severe pressure after cutting rates by 0.25% to 1.75%. In a double blow, Chinese Caixin manufacturing PMI came in below expectations, indicating even slower growth ahead. The AUD/JPY is down 1.75%, with the AUD/USD off by 1.22%.

• The move is triggering further ‘risk-off’ trading across markets with the USD/JPY down by 0.57%, with other yen pairs following suit.

• Dollar pairs are generally performing better, with the GBP/USD and EUR/USD rallying this morning.

                                                                                                                      
Coming up today:

• Coming up today, we have UK Manufacturing PMI at 09.30.

• This is followed by the annual Australian budget release at 10.30.

Trade Idea:

• May has historically been a strong period for risk markets and this could mean further upside for the GBP/USD.

                     

A good way to play this is a HIGHER trade predicting that the GBP/USD will close above 1.4800 in 21 days for a potential return of 121%.

                          
                                                         

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