The CBK raised interest rates by 150 basis points to 10.00 percent. Oil prices are expected to recover and there has been alot of pressure from demand as well as volatility in the forex market will affect inflation in the near term.
The CBk last raised interest rates in May 2013. The central bank had brought forward its July policy meeting and hence the move was expected and did not come as a surprise at all. Many economists anticipated the move by the CBK but forecasts were a raise in rates by 50 or 100 basis points. This move should avoid any further depreciation of the shilling. It also gives a strong message to the financial markets that the CBK is committed to reduce inflation and depreciation of the shilling.
The depreciation of the shilling started in March and hit lows that were only seen in 2011 when it traded at 106 to the U.S dollar. The interest rate was then raised to 18% in 2011. The U.S is also expected to tighten it’s monetary policy and this has been contributing to major currencies falling including the EUR, GBP and JPY which have fallen by more than 2000 pips in a couple of months. Low tourist turnout due to a constant threat from Al-Shabaab militia has also contributed vastly to the decline of the shilling. This has created a wider current account deficit.
The central bank said its usable level of foreign exchange reserves amounted to $6.739.2 billion, down from $6.859 billion at the end of April and $7.224 billion as of Feb. 26.
After the rate hike the shilling gained from 97.7 to 97.0 . However this is still a decline of 6.6% this year and 10.8% since early 2014.In May Kenya’s CPI rate eased to 6.87 percent from 7.08 percent in April. The government has been targeting an upper bound range of 2.5% on either side of the medium term target of 5%.
The IMF says the Kenyan economy is resillient and expects a growth of 6.5% this year.
Previously the central bank had also announced Forex derivatives trading in Kenya was to start in July.
Really excited to bring you this trading report. With the end of May it has been exactly 1 year since we started the signal service. This report is going to be slightly longer than usual as we will review all the previous 12 months as well. We started the signal service in June 2014. We have had 11 winning months since then and May has been our first and only loosing month since then. After trading for a full year we have made a total of 5649 pips. That is an average of 470 pips per month. Our best trading month was October 2014 when we made 1488 pips. Our worst trading month has been May 2015 where we lost 65 pips by the end of the month. We think those are brilliant statistics for any trader. Really happy with our trading performance.
Now looking at the month of May itself. This month is also our first loosing month, for the rest of the year we did make money. Every trader no matter how good or much experience they have goes through a trading slump. So the month of may is our first loosing month. It was a small loss really and considering we had some tough luck with orders placed in a few pairs but not getting executed. The trades which did not get executed would have actually ended up in profit.
This month we took 6 trades and lost 65 pips.
06.05.2015 AUDJPY SHORT 86 PIPS LOSS
12.05.2015 EURCAD LONG 271 PIPS PROFIT
18.05.2015 AUDUSD LONG 40 PIPS LOSS
18.05.2015 USDJPY SHORT 100 PIPS LOSS
25.05.2015 USDJPY SHORT 75 PIPS LOSS
25.05.2015 EURSEK LONG 35 PIPS LOSS
We missed EURCAD short trade and USDCAD long the orders did not get executed and would have ended up in significant profit had the trades been executed.
Our focus here at SZ Ventures has always been quality of signals than quantity of signals. Price action swing trading is our strategy which has been working excellently for us. In August 2014 we took 19 trades and this was our highest in any month. In December 2014 we took only 4 trades and this was the lowest in any month. Our average risk to reward for all trades taken has been 1:3. A good risk to reward really is the secret to our success. Our loosing trades have always been small and our winning trades have always been much much larger.Leave us a comment below to let us know what you think about signal service.
Our premium members have been making an average of 500+ pips per month and out standard members have been receiving 1 or 2 free trading signals per month and making an average of 100+ pips per month. Subscribe for our premium membership to receive all our signals. After a full year of trading we made 5649 pips!
EURUSD ON THE DAILY CHART. This is probably going to be the first trade for June. We have seen the 1.100 level previously acting as resistance as shown by the 2 blue circles. The price had broken through lower in the past week and now we are back up for a re-test. We are expecting this level to hold and we will be shorting this pair with a small stop loss. The price may also break this level and move higher, but that is the whole point of using a stop loss and trading with a good risk to reward. Remember every trade you take there is a 50% chance for you to win it or loose it, Hence the only thing that will make you profitable is Risk to Reward.
EURCAD on the daily chart has been on a clear downtrend. A head and shoulder pattern usually reverses the trend and we can clearly see an inverse head and shoulder pattern forming on this pair. We think it might just reverse the downtrend. Hence we will be watching for a long using price action signals. We will be watching for a pin bar, engulfing bar, morning star e.t.c Ideally we would like to enter at the black line. Our stop will be at the red line which is just below the neck line. This trade was also taken last week and we ended up with over 200 pips.