AUD/USD

Fed fund futures (FFF) suggest an 87.1% chance of 25bp hike for today's FOMC meeting - and I agree with that part. But what about the rest of the curve?

With volatility and headline risk remaining high, we take a look at some of the key drivers and how to approach the currency market under such conditions.

On the back of a 25bp hawkish hike, with hypothesized the potential for the RBA to be nearing a pause. Less than 24 hours later, Governor Lowe comes right out and says it.

An initial glance at RBA's statement suggests they are nearing the end of the tightening cycle, and perhaps one step closer to publicly discussing a pause.

If the RBA deliver another 25bp hike tomorrow, it will take their cash rate to a 10-year high of 3.6%.

The Australian dollar is feeling the strain of housing-related headlines today, with mortgage arrears on the rise and dwelling approvals on the decline.

December’s employment report raised a few eyebrows, as it was the first in a while to miss expectations and prompted us to question whether cracks were appearing in the economy. January’s report suggests there are.

The RBA hiked the overnight cash rate by 25bp to 3.35% - its highest level since September 2012 – and warned of further increases in the months ahead.

It seems that the Chinese government is willing to help with additional measures.

DAX rises after GDP upward revision, but China worries could cap gains. AUD/USD falls as China COVID cases rise.

The RBA’s November minutes lean towards 25bp hike/s with a pause along the way, with a 50bp hike likely requiring higher inflation expectations and wages.

Hopes are high that we’ll see core CPI data for the US soften slightly, but with the weaker dollar holding above key support it leaves room for gains with a slight ‘beat’.

AUD/USD recovers after weak Chinese inflation data. FTSE wobbles as results come in.

Business confidence came to a standstill according to a monthly NAB (National Australian Bank) survey, whilst consumer confidence is its lowest since the pandemic.

With the stronger than expected payroll data, the Fed can continue to do as it pleases regarding “price stability”.

The RBA are set to hold their November meeting tomorrow at 14:30 AEDT and, whilst the consensus is for a 25bp hike, it doesn’t mean they won’t do a 50bp one instead.

The RBA are set to hold their November meeting tomorrow at 14:30 AEDT and, whilst the consensus is for a 25bp hike, it doesn’t mean they won’t do a 50bp one instead.