Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX.
MACRO REPORT
The Aussie dollar surged against the US dollar during the mid-North American session as Fed Chairman Jerome Powell testified before the US Senate Banking Committee. Powell’s statement that rates have peaked and his indication of potential rate cuts later in the year boosted the Aussie dollar.
Powell’s confidence in achieving the Fed’s inflation target, combined with soft US jobs data, underpinned the AUD/USD pair, causing it to rebound from weekly lows and reclaim the 100 and 200-day moving averages (DMAs). The US ADP National Employment Report revealed that private companies added 140K jobs, just short of the expected 150K, but increased from the 111K job increase reported in the prior month.
Despite a weak local GDP report the previous day, the AUD/USD pair is currently trading at 0.65647, up 0.68% on the day.
Additional weakness in the Greenback coincided with an equally strong pullback in US yields amidst ongoing speculation about the timing of the Fed’s first rate cut, expected in June.
Locally, the RBA’s cautious approach, as one of the last major central banks to consider interest rate cuts, has helped constrain the pair’s downside potential.
Looking ahead today, Goods Trade Balance figures from Australia and China will draw interest. On the US front, traders are focused on Unemployment Claims, Revised Nonfarm Productivity data, and Balance of Trade, along with Powell’s testimony at the US House of Representatives.
Disclaimer:
The market update provided by Corporate Alliance FX (CAFX) is for reference only and does not constitute a bid, levy, offer or invitation to offer for the financial product, the basis for any contract or commitment, a recommendation for the purchase or sale of any investment instruments, financial, legal, tax, investment advice, investment advice or other opinions. It will not be legally liable for any consequences or losses caused by the information or content involved.
Corporate Alliance Group Pty Ltd T/A Corporate Alliance FX (CAFX) (ABN 58 167 119 226, AFSL 523351) (i.e. CAFX), CAFX independently holds the Australian Financial Services licence no. 523351 (AFSL), so CAFX is regulated by the Australian Securities and Investment Commission (ASIC) and, and although ASIC is a strictly regulatory body, it does not endorse a specific financial product. ASIC’s regulation of CAFX applies to all services under the financial licence held by CAFX, including the issuance of foreign exchange settlement, foreign exchange payments, foreign exchange risk control, hedging, market making and providing financial advice.
