Australian dollar could continue its gains against a weaker US dollar.
On Monday, the Australian Dollar (AUD) appears to be extending its winning streak for the sixth consecutive session.
The RBA Meeting Minutes moved market sentiment toward the possibility of no rate cuts anytime soon.
The AUD gains ground following the release of the Reserve Bank of Australia’s (RBA) meeting minutes. Which altered market sentiment toward the possibility of no rate cuts in the near future. Furthermore, the decrease in the US Dollar (USD) provides more upward support for the AUDUSD pair, maybe due to US Treasury yields fell ahead of Wednesday’s Federal Open Market Committee (FOMC) Minutes.
Australia’s ASX 200 falls following overnight losses on Wall Street.
The Australian dollar (AUD) may face pressures from lower Australian money markets. As the S&P/ASX 200 Index falls for the second straight session. Following overnight losses on Wall Street. This reduction is attributable to low mining stocks and metals prices. Furthermore, the Australian Bureau of Statistics provided mixed Wage Price Index data for the fourth quarter. Which did not appear to have a substantial impact on the Australian Dollar (AUD).
The greenback faces hurdles as US Treasury yields fall ahead of FOMC Minutes.
The US Dollar Index (DXY) is under negative pressure as market forecasts point to no further rate hikes by the Federal Reserve in upcoming meetings. According to the CME FedWatch Tool, the possibility of a Fed cut has significantly fallen to 8.5%.30.7% in March and May, respectively. The market now expects the easing to begin in June, with a chance of 54.3%.
Daily Digest Market Movers: Australian Dollar Appreciates on Weakness The Australian Wage.
Price Index (QoQ) increased by 0.9% in the fourth quarter, which was lower than the previous 1.3% increase. The index increased by 4.2% year on year, exceeding market expectations of 4.1%.
The Westpac Leading Index (MoM) fell by 0.1% in January, compared to the prior reading of 0.0%.
The ANZ-Roy Morgan Consumer Confidence Index rose to 82.8 this week from 82.6 the week before. Remarkably, the index has now spent a record 55 consecutive weeks below 85.
The RBA Meeting Minutes stated that the Board deliberated on on the prospect of hiking rates by 25 basis points (bps) or leaving them unchanged. While recent data suggested that inflation will return to target in a fair timeframe, it was acknowledged that this would “take some time.” As a result, the board concluded that it was prudent not to rule out further rate hikes.
The People’s Bank of China (PBoC) cut the five-year Loan Prime Rate (LPR) by 25 basis points, the greatest fall on record, from 4.20% to 3.95%. This measure was intended to strengthen the housing market. Analysts, however, believe that the total influence on economic stimulation may be negligible.
The Federal Reserve’s dot plot for this year implies a forecast of 75 basis points in interest rates. decreases, whereas the Fed funds futures market anticipates around 89 basis points in cuts.
ANZ forecasts that the Federal Reserve (Fed) will begin rate reduction in July 2024.
The three- and six-month US bills were auctioned at 5.23% and 5.1%, respectively.
