What Does The Data Mean To The Market?
In the Czech Republic, the benchmark interest rate is set by the Czech National Bank (CNB). The official interest rate is the two-week repo rate, a rate at which commercial banks are allowed to place excess funds at the end of the day with the Central Bank.
Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.
A higher than expected rate is positive/bullish for the CZK while a lower than expected rate is negative/bearish.
Historic Deviations And Outcome
February 6 2020 Today we saw a 0.25% deviation from forecast which gave a lovely and steady 190 pips move over about 15 minutes which would have given plenty of opportunities to enter.
Check out the price action here (Click the image to see the full chart):
Today we have a forecasted change to the interest rate to 1.25%, which is a 0.50% hike to the rate. All economists are unanimous of this outcome, but I’ll be ready to trade if the actual result is not as predicted.
Take a trade if we see a 0.25% deviation from the 1.25% forecast to take a buy or sell.
Hope this helps but please do your own analysis!!
Another shock to the markets today was when the highly anticipated cut to the Turkish interest didn’t happen; the markets quickly revalued the Turkish Lira’s value.
We saw a whopping 2000 pips in a few seconds: what a lovely move, a great trade.
See the video here:
Hi, I’m James, born in 1979 and grew up with a strong interest in IT and business. My first career was in IT support, which lasted 12 years before selling my company in 2009. I decided to move abroad and do something new! Forex caught my eye. I did the typical rookie thing of opening a real account, depositing far too much of my savings, and lost a small fortune. Although this experience was very negative at the time, it taught me some tough lessons that I still benefit from today. News events caught my eye; the patterns in the charts they created were repetitive and often predictable. I knew that if I could understand them more, I could make accurate predictions about how they would move. So I spent much time developing my trading method around thousands of hours of research and data. Now many years of trading around news events have earned me a good income, one that I’m sure others can benefit from.
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