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.
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Key Data Being Released Today Thursday the 6th of January 2022
- USD – FOMC Meeting Minutes – 6am
- USD – Unemployment Claims – Early Tomorrow Morning
- USD – ISM Services PMI – Early Tomorrow Morning
The Aussie Dollar – Fundamentals
After the FOMC meeting minutes was released the Aussie dollar was sold of falling roughly 0.5% on the back of the announcement. The Federal Reserve minutes showed that most Fed members judged that conditions for hiking rates could be met relatively soon if the labour market “improvements continued”.
Federal Reserve policymakers decided that monetary policy accommodation was no longer necessary, attributed to high inflation pressures and an improved labour market.
Regarding hiking rates, “most participants” judged that conditions for a rate hike could be met relatively soon IF the labour market “improvements continued”. Further added that “given the outlooks for the economy, labour market and inflation, it may become warranted to increase the Federal Funds Rate sooner or at a faster pace than participants had anticipated”.
Concerning the reduction of the balance sheet, Fed officials said that “it could be appropriate to begin to reduce the size of the Federal Reserve’s Balance sheet relatively soon after beginning to raise the Federal Funds Rate.”
In the meantime, Fed funds futures priced in an 80% rate hike in March, after December’s meeting minutes.
The market will now turn its attention to the next Tier 1 economic data release, early Saturday Morning our time the US Employment data will be released. Stay tuned, as this will be the focus for tomorrow’s market updated
The Aussie Dollar – Technical Analysis
The AUD/USD extends its initial slide from 0.7265 down to 0.7229, breaching below the of the 100 and the 200-hour simple moving averages (SMAs), while US 10-year bond yields rose to 1.712%, for the first time since October 2021.
At press time, the AUD/USD keeps pushing lower.
Resistance on the Top Side – We see resistance at 0.7233 (50DMA). If the market rebounds we see further resistance at 0.7300.
Support on the Downside – With the fall overnight we see the market heading for support at 0.7172. If this level is broken, we see further support at 0.7110 and 0.7000.
AUD/USD Daily Chart
DXY (USD INDEX) Daily Chart
Major Global Markets
- Stocks
- S&P 500 closed at 4700
- NASDAQ closed at 15764
- ASX 200 closed at 7565
- Currencies
- AUD/USD – At the time of writing this report trades at 0.7216
- AUD/JPY – At the time of writing this report trades at 83.81
- AUD/CNH – At the time of writing this report trades at 4.5976
- DXY (US Dollar Index) – At the time of writing this report trades 96.182
- AUD/EUR – At the time of writing this report trades 0.6382
- Bonds
- US 10-year Bonds are currently at 1.700
- Aussie 10-year Bonds are currently at 1.819
- Commodities
- Iron Ore 62% – Trading at USD/T 120.91
- Gold – trading at USD/OZ 1809
- Brent Crude Oil – Trading at USD/Bbl 80.20