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CAFX Market Update 07/3/2023

Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX.
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The AUD/USD pair recovered above 0.6730 in the early Asian session. The Aussie dollar is looking to gain further as the RBA will announce the interest rate decision. The RBA is expected to continue its policy tightening in the battle against soaring inflation.

Last week, the Australian monthly CPI softened significantly to 7.4% for January. Australian inflation has remained high and has not reacted as expected to the higher rates by the RBA. Therefore, RBA is expected to restrict monetary policy further in achieving price stability.

Moving forward, on the US front we have Fed Chairman Powell scheduled to speak and a series of employment data to look forward to this week. On another note UK GDP m/m figures and BOJ Monetary Policy statement will also attract market attention later on in the week.