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CAFX Market Update 27/01/2022

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

 

Key Data Being Released Today

New Zealand: CPI (QoQ 1.4% vs 1.3% expected)

 

Macro Report

The US Federal Reserve kept rates unchanged but indicated that it would be appropriate to start to raise interest rates soon with meeting members considering raising as early as March and asset purchases are to conclude in early March. The Federal Reserve Chair noted that there is potential for them to raise rates at every meeting. Furthermore, the balance sheet is much larger than it needs to be and there is to be a “substantial amount of shrinkage”. Treasuries sold off aggressively as a result of the Power press conference whilst equity markets gave up all of their rebound moves prior to the meeting to close flat on the day.

Bank of Canada kept interest rates unchanged as well at 0.25% as expected in the market but signalled their intention to hike rates after the Omicron wave passes.

The Russian and Ukraine conflict continues to weigh down markets as headlines indicate that Russia is preparing for Naval drills which is keeping tension in the region. The Turkish president has offered Russian and Ukrainian leaders to meet in Turkey to discuss the issues to mediate civil discussions for peace.

USD strength surged on Powell’s comments in what was a very rangebound market prior. AUDUSD tested the 50 Day Moving Average several times but failed to rally pass the level.

 

AUD/USD Daily Chart

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DXY (USD INDEX) Daily

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Major Global Markets

Currencies Level Change (%)
AUD/USD 0.7117 0.0100
AUD/JPY 81.6000 -0.0400
AUD/CNH 4.5320 0.1300
DXY 96.4980 0.5700
Rates Yield (%) Change (%)
US 10 Year 1.8727 0.0493
Aus 10 year 2.0430 0.0542
Equities Level Change (%)
S&P 500 4349.93 -0.1497
NASDAQ 14172.76 0.1700
ASX 200 6961.60 0.0000
Commodities Level Change (%)
Iron Ore 129.94 0.0000
Gold 1819.51 0.0600
Brent Crude oil 87.15 1.8100

 

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