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CAFX Market Update 16/12/2022

Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX.
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

Japan Services PMI
United Kingdom Core Retail Sales (MoM) (Nov)
PPI Input (MoM) (Nov)
Retail Sales (MoM) (Nov)
Composite PMI
Manufacturing PMI
Services PMI
Eurozone Manufacturing PMI (Dec)
S&P Global Composite PMI (Dec)
Services PMI (Dec)
CPI (YoY) (Nov)

Macro Report

Following a significant rally, the Aussie dollar has corrected all its gains. The AUD/USD pair plummeted over 2.5% on risk-off sentiment following a series of central banks’ interest rate decisions accompanied by hawkish guidance.

Shadowing the Federal Reserve, the Bank of England (BoE) has lifted its base rate by 50 basis points to 3.5%. The Swiss National Bank (SNB) and the European Central Bank (ECB) similarly hiked rates by 50 basis points following its policy meeting, raising its rates to 1.0% and 2%, respectively.

Overwhelmingly hawkish tones from central banks, underpinning market risk-aversion, have elevated the US dollar and led Wall Street to finish lower. The DXY, an index that measures the US dollar, is trading higher at around 104.5810, up 78% at the latest. As a risk-sensitive currency, the Aussie dollar suffers from the market’s broad risk-off mood, plummeting to a 0.66768 low. At the time of writing, the AUD/USD pair clings to the 0.6700 level, trading at 0.67029, down 0.95% for the day.

Adding to the depressed risk appetite, Australia’s PMIs revealed overall weakness in December. The country’s Manufacturing PMI fell to 50.4 from a prior 51.3 figure, while the Services PMI declined to 46.9 versus an earlier month’s print of 47.9.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6701 -0.03
AUD/JPY 92.3300 -0.02
AUD/CNH 4.6803 -1.70
DXY 104.5810  0.78
Rates Yield (%) Change
US 10 Year 3.44  0.25
Aus 10 Year 3.44 -0.38
Equities Level Change (%)
S&P 500 3,895.75 -2.49
NASDAQ 10,810.53 -3.23
ASX 200 7,204.80 -0.64
Commodities Level Change (%)
Iron Ore 110.00 -0.45
Gold 1,787.90 -1.75
Brent Crude oil 81.52 -1.43