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8/12/2021 Wednesday

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.

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 Wednesday the 8th of December 2021

  • No meaningful data is being released today


The Aussie Dollar – Fundamentals

The Aussie dollar has continued to power higher throughout the session on Tuesday, moving to the north of the $0.7100 level in recent hours as risk appetite has continued to improve. That marks a more than 1.5% recovery from last Friday’s lows of just under 0.7000, with 0.9% of those gains coming on Tuesday.


The main driver of the recovery in broad risk appetite on Tuesday appears to market pricing out prior pessimism about the impact of Omicron on the economic outlook in light of growing evidence that infections are comparatively “mild”. But the sentiment is likely also receiving a helping hand as Chinese authorities signal intent to provide support to the economy in 2022.


Perhaps the most important factor boosting AUD on Tuesday has been hawkish interpretations of the latest RBA rate decision. As expected, the bank held interest rates at 0.1% and pledged to continue buying bonds at a A$4B weekly pace until February. But the bank, whilst conceding that Omicron was a risk to the outlook, said it did not think the new variant would derail the recovery. Meanwhile, a reference to inflation being expected to sit within the bank’s 2.0-3.0% range in 2023 was removed from the statement, which some analysts saw as the bank opening the door to an earlier rate hike


The Aussie Dollar – Technical Analysis

The Aussie dollar continued to rally, it’s currently testing the 0.7110 level of resistance. We will be watching this very closely to see if the pre-Covid cyclical pattern of a bull run into the New Year holds true, or will just be false hope before another move lower.


Resistance on the Top Side – We will be watching closely to see if the market can consolidate a break of 0.7110, if it does we see more resistance at 0.7172 and 0.7300.

Support on the Downside –   if the market bounces off resistance and falls, we see support at the psychological level of 0.7000. If the market breaks 0.7000 continues to fall there is support at 0.6921 and then at 0.6800.



AUD/USD Daily Chart


DXY (USD INDEX) Daily Chart



Major Global Markets

  • Stocks
    • S&P 500 closed at 4686
    • NASDAQ closed at 16347
    • ASX 200 closed at 7313
  • Currencies
    • AUD/USD – At the time of writing this report trades at 0.7119
    • AUD/JPY – At the time of writing this report trades at 80.86
    • AUD/CNH – At the time of writing this report trades at 4.5297
    • DXY (US Dollar Index) – At the time of writing this report trades 96.296
    • AUD/EUR – At the time of writing this report trades 0.6319
  • Bonds
    • US 10-year Bonds are currently at 1.482
    • Aussie 10-year Bonds are currently at 1.695
  • Commodities
    • Iron Ore 62% – Trading at USD/T 108.04
    • Gold – trading at USD/OZ 1784
    • Brent Crude Oil – Trading at USD/Bbl 75.30