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CAFX Market Update 11/01/2022

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 Friday the 31st of December 2021

  • Today
    • AUD Retail Sales (MoM) (Nov) (Forecast 3.9%, Previous 4.9%)
    • AUD Trade Balances (Nov) (Forecast 10.600B, Previous 11.220B)
  • Overnight
    • No major economic releases overnight.


The Aussie Dollar – Fundamentals

Major currencies were mixed against the US dollar in European and US trade. The Aussie dollar fell from US72 cents to near US71.50 cents was near US71.75 cents in late US trade.  The Euro fell from near US$1.1340 to US$1.1285 and was near US$1.1330 in late US trade.

In US economic data, consumer inflation expectations remained at a record high (eight-year high) of 6.0% in December. Wholesale inventories rose 1.4% in November (survey: +1.2%)

US treasuries ended mixed on Monday, as fears about the potential for the Federal Reserve to lift rates continue dominate. Goldman Sachs, J.P. Morgan and Deutsche Bank all expect the Fed to lift rates four times this year. US 10-year yields were broadly flat near 1.76%. But US 2-year yields rose by 3 points to a 22-month high near 0.90%

European sharemarkets were weaker on Monday and those in the US were mixed, as they rallied into the close.  The key theme still seems to be that of rising bond yields.

Notably, Fed Chair Jerome Powell released comments ahead of tomorrows scheduled Senate Committee hearing, that the Fed will “use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched”.  The comments, amidst the earlier than anticipated departure of Fed member Richard Clarida, indicate how seriously U.S. central bankers are taking the threat of inflation and heat in the job market.

All eyes will be on the US CPI figures to be released on Wednesday evening, with expectations are for a 7% print.

AUD/USD Daily Chart


Major Global Markets

  • Stocks
    • S&P 500 closed at 4670
    • NASDAQ closed at 14942
    • ASX 200 closed at 7447


  • Currencies
    • AUD/USD – At the time of writing this report trades at 0.7174
    • AUD/JPY – At the time of writing this report trades at 82.68
    • AUD/CNH – At the time of writing this report trades at 4.5788
    • DXY (US Dollar Index) – At the time of writing this report trades 95.951
    • AUD/EUR – At the time of writing this report trades 0.6333


  • Bonds
    • US 10-year Bonds are currently at 1.7638
    • Aussie 10-year Bonds are currently at 1.884


  • Commodities
    • Iron Ore 62% – Trading at USD/T 125.45
    • Gold – trading at USD/OZ 1800
    • Brent Crude Oil – Trading at USD/Bbl 80.87