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CAFX Market Update 05/10/2022

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

Australia Retail Sales (MoM)
New Zealand RBNZ Interest Rate Decision
Eurozone S&P Global Composite PMI (Sep)
Services PMI (Sep)
United Kingdom Composite PMI (Sep)
Services PMI (Sep)
United States ADP Nonfarm Employment Change (Sep)
Trade Balance (Aug)
CPI (MoM) (Aug)
CPI (YoY) (Aug)

Macro Report

The Aussie dollar has since recovered from its initial drop following the knee-jerk reaction to yesterday’s RBA’s interest rate decision. The RBA hiked its Official Cash Rate (OCR) by a surprising 25 basis points, compared to projections of a 50-basis point increase. The hike has lifted the OCR to 2.60%, bringing some relief to Australian households.

The AUD/USD currency pair is hovering around the 0.6500 level at the latest, marginally lower for the day. Meanwhile, the US dollar witnessed a decline following yesterday’s release of ISM Manufacturing PMI data which showed a reading of 50.9 for September, versus the projected 52.2 and prior print of 52.8. The US Dollar Index (DXY) dropped below the 111.00 level during yesterday’s trading and continues to extend its decline to the 110.00 level.

Commodity-wise, Gold held on to its recent gains at the $1730USD per ounce level, and Brent Crude is up 3.31%, breaking through the $90USD per barrel level.

Looking ahead today, the RBNZ will make its interest rate decision. Markets are predicting a fifth consecutive 50-basis point rate hike, pushing the country’s OCR above 3% to 3.5%. For the US, focus will be on today’s ADP Nonfarm Employment Change and Friday’s highly anticipated US Nonfarm Payrolls (NFP). NFP data is forecasted to be lower at 250k compared to the previous reading of 315k.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies   Level Change (%)
AUD/USD 0.6504  0.05
AUD/JPY 93.7460  0.02
AUD/CNH 4.5751 -1.04
DXY 110.1920 -1.39
Rates   Yield (%) Change
US 10 Year 3.63  0.001
Aus 10 Year 3.72 -0.179
Equities   Level Change (%)
S&P 500 3,790.93  3.06
NASDAQ 11,176.41  3.34
ASX 200 6,699.30  3.75
Commodities   Level Change (%)
Iron Ore 94.22  1.05
Gold 1,730.50  1.67
Brent Crude oil 91.79  3.30