Major Market Movers: The RBA Cuts 1 Point

Daily Forex Fundamentals | Written by Crown Forex | Dec 02 08 08:21 GMT |

The Reserve Bank of Australia decided today to slash its target rate from 5.25% to a surprising 4.25%, signaling a greater tendency world wide to lower rates, and as some might say, the world might be heading towards a zero rate policy in the near future!!! Later the same day, the BoJ decided to keep rates steady at 0.3%, still preserving its status as the lowest interest amongst all G7 countries, while they decided to accept lower- grade corporate bonds as collateral for loans to banks to reinforce credit markets as more woes in the economy are being discovered. The RBA commented that its move was crucial to restore confidence back in markets, and maybe that is the only way to escape the potential recession not only in Australia, or America, or Europe…it's the global recession we are talking about, and only the collaborative efforts can risk the world from this great fear. Today, we don't have a lot of fundamentals coming on in the markets, so the main focus will be on the Euro Zone PPI for the month of October, as expectations are to see a decline of 0.3% following a decline of 0.2%, while the yearly reading is expected to decline to 7% down from 7.9% in the previous month. The fears from recession, along with deflation are haunting central banks all around the globe, which again might lead us to believe that the world might be heading to a zero interest rate policy, and as far as I am concerned we saw all major banks are moving steadily towards that, except the ECB, the one and only bank which did not yet take a powerful measure to avoid such a risk. The European Central Bank will meat later this week with expectations to see a slash in rates to 2.75% from the current at 3.25%, but does that mean that they will be able to detour the great risks of deflation, or they actually know what they are doing, and they realize that the problem might not be as severe as we think, and they preserve their currency to be the highest paying amongst its mates. Let's wait and see dear reader, today's data might give us a hint to what the ECB decision might be, and how bad the situation is…not only in Europe, but in the whole world. Crown Forex disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.