Market Analytics and Technical Considerations
Key Points
- After the US Dollar started to strengthen again, the Australian Dollar fell.
- China is being criticized for its lockdowns connected to the zero-case Covid-19 outbreak.
- Risk and growth-related assets are having difficulty. Will the AUD/USD pair resume falling?
The Australian dollar tumbled to begin the week while the US dollar and Japanese yen jumped higher on breaking down worldwide development possibilities.
As the number of cases across the country rises, China’s pursuit of a “zero-case COVID-19” policy is being challenged. The communist party’s resolve to maintain the policy is being tested by protests in several major cities against the ongoing lockdowns.
As a result, assets that are aligned with growth and risk have come under pressure .Hong Kong’s Hang Seng Index (HSI) is leading the way down in APAC equity prices, trading more than 2% lower at one point.
The WTI futures contract for crude oil fell below US$ 74 bbl for the year, while the Brent contract is close to US$ 81 bbl. At the time of printing, the price of one ounce of gold is steady at around US$ 1,750.
In addition to unfavorable macroeconomic conditions for the Australian dollar, retail sales decreased by -0.2% month-over-month in October, as opposed to the expected 0.5 percent and 0.6 percent previously.
In addition, RBA Governor Philip Lowe addressed an estimate hearing in the Senate. He stated – it’s not guaranteed, but where I sit today, I think we have a better chance of pulling it off than most other countries regarding achieving a soft landing for the economy.
The market has priced in a 25 basis point increase ahead of the RBA’s meeting on Tuesday of next week to decide on monetary policy.
Today’s agenda includes a number of ECB speakers, including President Christine Lagarde. Williams and Bullard from the Federal Reserve will also use the wires in the future.
