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
Macro Report
The Aussie Dollar, driven by the US Dollar movement, was pressured by the DXY’s upward trend last week. The DXY broke through the 110.00 mark last Friday, weighing on global market sentiment and sending risk assets, equities and commodities including copper and iron ore lower.
Today, the Chinese megacity of Chengdu will gradually return to production and normal life following more than two-weeks of COVID lockdowns and restrictions. This reopening may lift industrial metal this week. Additionally with restrictions in China rolling back, the Aussie dollar may also be able to benefit.
The S&P 500 dropped 0.72% to 3,873.33, Dow Jones lost 139.40 points, or 0.45%, to 30,822.42, and The Nasdaq Composite neared a 1% decline.
Although this week’s economic docket is light on hard data, the highlight will be the Feds and other central banks’ interest rate decisions this Thursday. The Feds will likely announce a third consecutive 75 basis point rate hike on stubbornly high inflation, accompanied by updated interest rate projections. However, whether US officials deliver a super-sized 100 basis point hike at the upcoming meeting remains the current debate. The interest rate differentials will continue to work against the Aussie Dollar as it drives up the US Dollar and policy-sensitive US Treasury Yields.
Following the Feds meeting, the Band of Japan and Bank of England will announce their latest monetary-policy decision as inflation remains well above central banks’ 2% threshold.
AUD/USD Daily Chart
DXY (USD INDEX) Daily Chart
Major Global Markets
| Currencies | Level | Change (%) |
| AUD/USD | 0.6729 | 0.19 |
| AUD/JPY | 96.1000 | 0.06 |
| AUD/CNH | 4.7018 | -0.08 |
| DXY | 109.6420 | -0.11 |
| Rates | Yield (%) | Change |
| US 10 Year | 3.45 | -0.008 |
| Aus 10 Year | 3.68 | -0.072 |
| Equities | Level | Change (%) |
| S&P 500 | 3,873.33 | -0.72 |
| NASDAQ | 11,448.40 | -0.90 |
| ASX 200 | 6,739.10 | -1.52 |
| Commodities | Level | Change (%) |
| Iron Ore | 101.50 | -2.87 |
| Gold | 1,686.30 | 0.17 |
| Brent Crude oil | 91.91 | 0.61 |