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.
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Key Data Being Released Today
Australia – RBA decision (No change expected)
China – PMI
South Korean – Trade Balance (-$280m expected)
Macro Report
Volatility remained elevated overnight, as Russia and Ukraine held ceasefire talks with no signs of progress. A new round of talks will take place in a few days, but hostilities resumed with Moscow bombarding civilian buildings near Kyiv.
European share markets eased, US equities trimmed losses, and treasuries jumped driving two-year yields near where they were before a steeper-than-expected inflation report earlier this month. The VIX, at a heighted level of 32, a reflection of the uncertainty and instability.
Russia’s central bank more than doubled its key policy rate on Monday, increasing its key rate to 20%, as a means to prop up the rouble. Whilst the Russian currency down 24% relative to Friday’s closing levels, the contagion to other EM currencies, and also risk currencies such as the AUD, has been limited.
Major currencies were firmer against the US dollar in European and US trade. The Aussie dollar rose from lows near US71.75 cents to highs near US72.63 cents and was near US72.60 cents in US trade. The Euro rose from lows near US$1.1140 to highs near US$1.1244 and was near US$1.1210 in afternoon US trade.
Global oil prices rose on Monday with fears that the blocking of Russian banks from a global payments system could cause severe disruption to its oil exports.
Speaking overnight and while acknowledging the Russia Ukraine crisis as a risk, Fed Bostic said that he favours raising interest rates by 25 bps in March, but warned that he would consider a larger half-point move if monthly inflation readings fail to decline from elevated levels.
Ahead, In Australia, data on home prices is released with the balance of payments, lending and government finance data. The Reserve Bank Board meets. In the US, the ISM and Markit manufacturing purchasing managers indexes are released with construction spending.
AUD/USD Daily Chart
DXY (USD INDEX) Daily
Major Global Markets
| Currencies | Level | Change (%) |
| AUD/USD | 0.7263 | -0.01 |
| AUD/JPY | 83.51 | 0.01 |
| AUD/CNH | 4.5857 | -0.02 |
| DXY | 96.7180 | 0.11 |
| Rates | Yield (%) | Change (%) |
| US 10 Year | 1.825 | -0.14 |
| Aus 10 year | 2.14 | -0.01 |
| Equities | Level | Change (%) |
| S&P 500 | 4374 | -0.24 |
| NASDAQ | 14238 | 0.34 |
| ASX 200 | 7049 | 0.73 |
| Commodities | Level | Change (%) |
| Iron Ore | 122.92 | -0.59 |
| Gold | 1908.98 | -0.00 |
| Brent Crude oil | 98.1 | 4.23 |
