Good Morning,
Welcome to our daily market update where we help keep you informed on the latest happenings in the world of FX and show you what this means for the Mighty Aussie Dollar.
If you have any questions or would like anything further explained, please don’t hesitate to reach out to your account manager or email info@cafx.com
Key Data Being Released Today Friday the 10th of December 2021
- No real impactful data during the day
- USD – Saturday Morning Our Time
- US CPI – Exp. 0.7%
The Aussie Dollar – Fundamentals
With not much happing in Australia in the last couple of days we look to the US for direction.
The USD continues to recover within a wider consolidative phase ahead of Friday’s Consumer Price Index and next week’s Federal Reserve meeting.
The central bank divergence between the Fed and Reserve bank of Australia has undermined the Aussie of late due to the dovish tones of the RBA. Beyond the Fed, attention is already turning to the RBA February policy meeting. The Bank has made it clear that it will be considering its QE program in the new year and speculation is already mounting that an end to the program could be a favored outcome for the Bank. A better tone in risk appetite more generally has allowed AUD/USD to pull back some ground.
Looking ahead for the week, the US Consumer Price index will be key. Analysts expect inflation to slow significantly as fiscal stimulus fades and supply constraints ease, but they don’t expect the data to be validated in the near term.
Meanwhile, in the third quarter, Australian underlying CPI inflation has registered 2.1% YoY and at the bottom of the RBA’s 2% to 3% target and below the average of the past 30 years. This clearly contrasts with some of the high inflation prints for other G10 economies especially that of the US which is likely to help the AUD/USD remain underpinned should the US CPI come in hot.
The Aussie Dollar – Technical Analysis
Resistance on the Top Side – the market tested and failed to break resistance at 0.7172. If 0.7172 is broken we see more resistance at 0.7300, which is very close to the 50 Day MA (0.7312)
Support on the Downside – If the market continues to fall, we see support at 0.7110 with more support at the psychological level of 0.7000. If the market breaks 0.7000 continues to fall there is the support at 0.6921 and then at 0.6800.
AUD/USD Daily Chart
DXY (USD INDEX) Daily Chart
Major Global Markets
- Stocks
- S&P 500 closed at 4667
- NASDAQ closed at 16155
- ASX 200 closed at 7384
- Currencies
- AUD/USD – At the time of writing this report trades at 0.7142
- AUD/JPY – At the time of writing this report trades at 81.08
- AUD/CNH – At the time of writing this report trades at 4.5550
- DXY (US Dollar Index) – At the time of writing this report trades 96.232
- AUD/EUR – At the time of writing this report trades 0.6329
- Bonds
- US 10-year Bonds are currently at 1.497
- Aussie 10-year Bonds are currently at 1.653
- Commodities
- Iron Ore 62% – Trading at USD/T 106.49
- Gold – trading at USD/OZ 1774
- Brent Crude Oil – Trading at USD/Bbl 73.98