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The Dow Jones Industrial Average closed down 1,152.46 points, or 2.18%, at 51,594.86 on Wednesday, July 29; the S&P 500 closed down 112.40 points, or 1.51%, at 7,316.38; and the Nasdaq Composite closed down 433.97 points, or 1.74%, at 24,442.94 on Wednesday, July 29.July 30th - U.S. stocks initially rose and then fell after the Federal Reserve announced its decision on Wednesday. The Dow Jones Industrial Average closed down 2.18%, the S&P 500 fell 1.5%, and the Nasdaq Composite fell 1.7%. SK Hynix (SKHY.O) fell 2.6%, SanDisk (SNDK.O) fell 7%, Micron Technology (MU.O) fell 9.9%, Nvidia (NVDA.O) fell 3.5%, and Seagate Technology (STX.O) rose more than 2%. The Nasdaq China Golden Dragon Index closed up 1.7%, and Li Auto (LI.O) rose more than 4%.According to CNBC, "New Bond King" Gundlach said the Federal Reserve may raise interest rates in September, especially if the yield curve continues to steepen.Market news: Canadian Prime Minister Carney has dismissed the idea that Canada should restrict the supply of critical resources to the United States in retaliation for its tariff policies.On July 30th, analysts described the Federal Reserves decision as "hawkish inaction." While a majority of members chose to keep interest rates unchanged, three members—Dallas Feds Logan, Cleveland Feds Hammark, and Minneapolis Feds Kashkari—voted in favor of a 25-basis-point rate hike. Barclays Marc Giannini stated, "The FOMC made a hawkish inaction decision." "This policy decision was made amidst significant hawkish headwinds, with these hawkish members favoring an immediate rate hike rather than waiting for more data." Previously, economists had widely expected two dissenting votes, making Kashkaris vote in favor of the rate hike surprising to some. Janus Henderson Investors analyst Daniel Syluk stated, "The three dissenting votes highlight that there remains a considerable force within the committee concerned about inflation."

AUD/USD falls approaching 0.7200 despite the former RBA governor's aggressive forecasts

Alina Haynes

Jun 08, 2022 11:59

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Bears and buyers continue to fight for position around 0.7220-25 as sentiment is mixed and investors remain cautious ahead of the week's big data/events. In doing so, the Australian duo struggles to defend the hawkish remarks of former Reserve Bank of Australia (RBA) Governor Ian Macfarlane.

 

Ex-RBA Governor Macfarlane warned early Wednesday morning about chronically rising inflation and the need to drastically increase interest rates. The former policymaker also stated, "There is sufficient scarcity in Australia and the United States to maintain a high inflation rate."

 

In contrast, China's Vice Commerce Minister Wang Shouwen joined China's Vice Finance Minister Zou Jiayi in reiterating concerns about a global economic downturn and a decline in demand. Recent consensus among policymakers held that the rise of global demand is slowing.

 

It's worth noting that a rebound in US Treasury rates and apprehension ahead of Thursday's European Central Bank (ECB) meeting, as well as Friday's US Consumer Price Index (CPI) for May, tend to stifle the AUD/USD pair's movements.

 

In spite of this, 10-year US Treasury note rates jump two basis points (bps) to 2.99 percent the day after breaking a six-day downward trend. A record decline in the US trade deficit and optimism on the US budget appear to have prompted a recall of US Treasury bond sellers. The US trade deficit for April decreased 19.1 percent from the previous day to USD87.1 billion.

 

Other market optimists were defended by US Treasury Secretary Janet Yellen and optimism for a quicker economic rebound in China. Tuesday, US Treasury Secretary Yellen spoke before the Senate Finance Committee about the Fiscal Year 2023 Budget while stating that the US economy faced problems from "unsustainable levels of inflation" and supply chain disruptions. The official said, "An adequate budget is necessary to support the Fed's efforts to control inflation without damaging the labor market."

 

It should be noted that World Bank (WB) President David Malpass's warning that faster-than-anticipated tightening might force certain nations into a debt crisis akin to that of the 1980s appears to have impacted on the quotation as of late. The risk-negative news from Ukraine may follow a similar trajectory. Politico reported that Ukraine has not yet achieved a deal with Russia or Turkey to enable the safe passage of its grain ships in the Black Sea, casting doubt on a U.N. initiative to build a crucial food corridor.

Technical Evaluation

A two-week-old support line protects AUD/USD buyers at 0.7205. However, the 200-day moving average and the recent top, located around 0.7255 and 0.7285, may challenge the Aussie pair's upside before the bulls regain control.


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