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CAFX Market Update 31/08/2022

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

New Zealand – ANZ Business Confidence (Aug)
Australia – Construction Work Done (QoQ) (Q2)
United States – Private Sector Credit (MoM) (Jul)
– Chinese Composite PMI (Aug)
– Manufacturing PMI (Aug)
– Non-Manufacturing PMI (Aug)
Eurozone – Core CPI (YoY) (Jul)
United States – ADP Nonfarm Employment Change (Jun)
– Chicago PMI (Aug)
Canada – GDP (MoM) (Jun)
– GDP Annualized (QoQ) (Q2)

Macro Report

The Aussie dollar is vulnerable as the US dollar regains upside momentum and continues to inch higher on Powell’s hawkish forward guidance, setting the expectation of an aggressive Fed. Following yesterday’s bears, sentiment has turned cautious on this morning’s US Consumer Confidence. Figures showed consumer confidence in August rose for the first time in four months to a level higher than expected. The Conference Board’s index advanced to 103.2, compared to a downwardly revised reading of 95.3 the prior month.

US treasury yields edged higher, with the 10-year yield above the 3.1% level. Crude oil erased its recent gains as markets feared softened demand for fuel, and Brent tumbled to below the $100USD per barrel level.

Today’s critical China data and US Nonfarm Payroll may threaten the Aussie dollar. Regarding the US ADP Employment Change for August, analysts expect the report to show a 200,000 rise in jobs after rising by 128,000 in July. The Fed may maintain its current approach to curbing inflation if the ADP Nonfarm Payroll update shows evidence of a strong labour market.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6855  0.01
AUD/JPY 95.1200 -0.01
AUD/CNH 4.7462 -0.56
DXY 108.7730 -0.03
Rates Yield (%) Change
US 10 Year 3.10  0.071
Aus 10 Year 3.59 -0.012
Equities Level Change (%)
S&P 500 3,986.16 -1.10
NASDAQ 11,883.14 -1.12
ASX 200 6,998.38  0.47
Commodities Level Change (%)
Iron Ore 105.50 -2.77
Gold 1734.10 -0.13
Brent Crude oil 99.31 -5.50