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CAFX Market Update 22/08/2022

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

China                         – PBoC Loan Prime Rate
Canada                    – New Housing Price Index (MoM) (Jul)

Macro Report

The US Dollar Index (DXY) remains strong, marking a high of 108.215 before ending last week at the 108.1030 level. With markets leaning towards a 50 over 75 basis point rate hike in the September FOMC meeting, the Feds could choose to make a strong hawkish statement by delivering a surprise 75-basis point rate increase. However, the Fed’s tightening expectations will likely take a backseat as the focus shifts towards the Jackson Hole Symposium and the highly anticipated speech from the Fed chair.

As for China, the People’s Bank of China (PBOC) is due for its monetary policy decision this morning at 11:15 am. Both its 1-year and 5-year loan prime rates (LPR), currently at 3.70% and 4.45%, respectively will likely be lowered in hopes of reviving the housing sector and overall economy. The coming decision could deliver immediate risk for the Aussie dollar, as the currency is often seen as a ‘China proxy’ and its recent downbeat economic data has weighed heavily on the AUD.

Commodities-wise, Oil dropped below the $90USD per barrel level due to demand concerns, while gold continues to be pressured by a firm US dollar. As for US Equities, the Nasdaq Composite tumbled 2.01% to 12,705.21 last week, and the S&P also finished lower at 4,228.48, falling by 1.29%.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6874 -0.01
AUD/JPY 94.1870  0.02
AUD/CNH 4.6948  0.16
DXY 108.1630 -0.01
Rates Yield (%) Change
US 10 Year 2.7870 -0.033
Aus 10 Year 2.69 0.05
Equities Level Change (%)
S&P 500 4,228.48 -1.29
NASDAQ 12,705.21 -2.01
ASX 200 7,114.46  0.02
Commodities Level Change (%)
Iron Ore 105.64 -4.06
Gold 1,760.40 -0.14
Brent Crude oil 95.64 -1.12