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CAFX Market Update 6/12/2022

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 Household Spending (YoY) (Oct)
United Kingdom BRC Retail Sales Monitor (YoY) (Nov)
Construction PMI (Nov)
Australia Current Account (Q3)
RBA Interest Rate Decision (Dec)
Retail Sales (MoM) (Oct)

Macro Report

The Aussie dollar has taken a beating against the Greenback, plunging below the 67 cents level on upbeat US Services PMI. Data for November showed surprising strength, soaring to 56.6 from 54.4 in October due to a surge in business activity. This above-expectation acceleration in service demand has pushed US treasury yields higher, lowered stocks and allowed the US dollar to regain strength amidst boosted chances for a more hawkish fed at the upcoming December meeting. At the time of writing, the AUD/USD is trading at 0.67018, down from yesterday’s high of 0.68509, dropping more than 2%.

All eyes are on RBA’s interest rate decision today. Governor Lowe is expected to lift rates by 25 basis points for a third consecutive time, potentially pushing the Official Cash Rate (OCR) from 2.85% to 3.1%. This comes before tomorrow morning’s release of quarterly Aussie GDP data, anticipated to report a 6.3% growth year-on-year.

Nevertheless, domestic data does not appear to hold the same impact on the risk-sensitive Aussie as global developments. The Aussie dollar is now battling a recalibration of Fed expectations and soured market moods which may see the Aussie at the mercy of US dollar bulls.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6702  0.06
AUD/JPY 91.5860 -0.03
AUD/CNH 4.6690 -1.98
DXY 105.2890  0.71
Rates Yield (%) Change
US 10 Yr 3.57  0.45
Aus 10 Yr 3.37 -0.06
Equities Level Change (%)
S&P 500 3,998.84 -1.79
NASDAQ 11,239.94 -1.93
ASX 200 7,325.60  0.33
Commodities Level Change (%)
Iron Ore 107.44  1.43
Gold 1,780.40 -0.05
Brent Crude oil 82.68 -3.38