EUR/USD 1.16805
0.399%
Gold 4589.49
1.817%
Oil 58.799
0.309%
USD/JPY 157.868
-0.007%
GBP/USD 1.34638
0.431%
GBP/JPY 212.555
0.425%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
On January 12th, ING Bank currency analyst Francesco Pesole stated in a report that the Swiss franc has become the most popular safe-haven currency among major currencies amid concerns about the Federal Reserves independence. Pesole pointed out that the Swiss franc became the best-performing G10 currency on Monday after news broke that Fed Chairman Powell was facing a criminal investigation over the Feds headquarters renovation project. Powell stated that this was merely an excuse for President Trump to force the Fed to cut interest rates. Pesole also indicated that the euro and Swedish krona could potentially benefit from these concerns about the Feds independence.On January 12, Zhipu (02513.HK) issued an announcement stating that, following recent reports that the Group has established a strategic partnership with a travel platform, and after making reasonable inquiries regarding the Company in the relevant circumstances, the Company confirms that the partnership is conducted in the ordinary and usual course of the Groups business. The Company is not aware of any information that needs to be disclosed to avoid a false market in the Companys securities, or any inside information that needs to be disclosed under Rule 13.09(2) of the Listing Rules and Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).Federal Housing Finance Agency Director Pulte: Fannie Mae and Freddie Mac are valued between $500 billion and $1 trillion.Federal Housing Finance Agency Director Pulte: Fannie Mae and Freddie Macs initial public offerings are still under discussion.Federal Housing Finance Agency Director Pulte: I will meet with homebuilders this week.

Outlook for the Australian Dollar: RBA Action Does Little to Boost AUD

Alina Haynes

May 09, 2022 10:27

Following rate decisions from the RBA and the Federal Reserve, the Australian Dollar oscillated erratically over the course of the week. Wednesday and Thursday saw daily AUD/USD movements of more than 2 percent in opposing directions.

 

The clear message for the Australian Dollar is that it remains susceptible to fluctuations in the US Dollar.

 

The core underpinnings of the Australian economy remain robust. Public and private debt levels are quite manageable. This week's announcement of the trade balance (+9.3 billion AUD) underlined the strength of exports. The unemployment rate is at an all-time low of 4 percent, and economic growth is robust.

 

As the US Dollar adjusts to a Federal Reserve that is finally tightening monetary policy at breakneck pace to rein in skyrocketing inflation, none of this matters for the AUD/USD.

 

While the Reserve Bank of Australia (RBA) raised rates by 25 basis points (bp) on Tuesday, as anticipated in this column over a month ago, the Federal Reserve raised the stakes by 50 bp on Wednesday.

 

Fed Chair Jerome Powell effectively ruled out futures price increases of 75 basis points, causing the USD to weaken as the market had anticipated such increases.

 

The Dollar reversed course the following day after former Vice Chair Richard Clarida appeared to return to the super hawk position by stating, "Getting to neutral quickly will not be sufficient." AUD/USD was swept up in the turmoil.

 

The USD/CNY was permitted to fall to its lowest level since November 2020 prior to the weekend, which could have implications for the broader currency markets. If the currency of the second-largest economy in the world continues to erode against the US dollar, the dollar's strength may become even more widespread.

 

Consequently, the AUD/USD pair is in a vulnerable position as it trades near 18-month lows. The upcoming week will be dominated by Fed speakers. Any increase in hawkish rhetoric could lead to another jump in US Dollar strength, exposing AUD to losses.

 

The graph below illustrates the sensitivity of the Australian dollar to changes in the US dollar.

Index AUD/USD against US Dollar (DXY)

image.png 


Suggestion