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.
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Key Data Being Released Today Wednesday the 18th of January 2022
- Today
- AUD HIA New Home Sales (MoM) (Previous 7.7%)
- AUD Westpac Consumer Sentiment (Jan) (Previous – 1.0%)
- Overnight
- GBP CPI (YoY) (Dec) (Forecast 5.2%, Previous 5.1%)
- USD Building Permits (Dec) (Forecast 1.700M, Previous 1.717M)
The Aussie Dollar – Fundamentals
Major currencies were mostly weaker against the US dollar in European and US trade. The Aussie dollar dipped from highs near US72.04 cents to lows near US71.68 cents and was near US71.80 cents at the US close.
The Euro fell from highs near US$1.1404 to lows near US$1.1312 and was near US$1.1320 at the US close.
In economic data, the US data was somewhat seen as negative with the New York Empire State manufacturing index fell from 31.9 to -0.7 in January (survey: 25). The NAHB housing market index eased from 84 to 83 in January (survey: 84). However, in Europe, the German ZEW survey lifted from g from 29.9 to 51.7 in January (survey: 32).
US treasury yields, which were a driver of the weakness in the Aussie Dollar commencing in Asian trading hours, jumped to 2-year highs and 2-year yields breached 1% on Tuesday as traders prepared for the US Federal Reserve to be more aggressive in tackling elevated inflation. US 10-year yields rose by 11 points to near 1.88%. And US 2-year yields lifted by 8 points to near 1.05%.
The risk-off mood was also evident in European and US stockmarkets, which were lower across the board. The Dow Jones Industrial Average had its biggest daily decline since November. The tech-heavy Nasdaq 100 sank more than 2.5%, dragged lower by megacaps such as Apple Inc. and Meta Platforms Inc. The NASDAQ dropping the most among major indexes on Tuesday and now has fallen about 9.7% from its Nov. 19 record closing high, close to confirming a 10% correction for the first time since early 2021. The tech-heavy index also closed below its 200-day moving average, a key technical support level, for the first time since April 2020.
Oil surged to the highest level in seven years, underscoring the inflation challenges facing the Fed.
Investors will be zeroing in on next week’s Fed policy meeting for more clarity on central bankers’ next moves to rein in inflation.
AUD/USD Daily Chart
DXY (USD INDEX) Daily
Major Global Markets
| Currencies | Currently | |
| AUD/USD | 0.7183 | |
| AUD/JPY | 82.31 | |
| AUD/CNH | 4.5679 | |
| AUD/EUR | 0.6343 | |
| DXY | 95.761 | |
| Bonds | ||
| US 10 Year (%) | 1.8771 | 0.11 |
| Aust 10 year (%) | 1.985 | 0.04 |
| Stocks | ||
| S&P 500 | 4577.1 | -1.84% |
| NASDAQ | 14507 | -2.60% |
| ASX 200 | 7408.8 | -0.11% |
| Commodities | ||
| Spot Iron Ore ($US/t) | 127.3 | 2.70% |
| Gold futures ($US/oz) | 1812.4 | -0.20% |
| Oil Brent ($US/b) | 87.51 | 1.20% |