Market sources are reporting a flurry of
trades in the seconds leading up to the release of the latest Reserve Bank of
Australia (RBA) monetary policy decision today.
The sources say that price action on at
least three multi-dealer venues preceded the announcement that the central bank
had cut its key interest rate by 25 basis points to 1.5% – the lowest in
Three sources say they saw a sudden spike
in trading, led by “aggressive selling” in the lead up to the announcement.
This saw the AUD drop from the 0.7540 level to below 75 cents, the sources
report trades at 0.7486, 0.7488 and 0.7495 on at least three separate venues.
Most of the selling was said to be in the
five seconds leading up to the RBA announcement and driven by algorithmic
traders. In the aftermath of the official release the AUD traded around 0.7500
before profit taking saw the pair drift higher to last trade at 0.7520.
The price action recalls several events
last year when the RBA announcement was preceded by much larger spikes in the
AUD/USD market. The central bank reviewed its security procedures and was
satisfied there were no leaks, leading to the suggestion that high speed
traders were taking advantage of thin market conditions immediately before
major releases to drive a quick move into which they could take profit.