Market Watch APAC – 23rd May 2024
The US-dollar gains as yields rise, after the FOMC Minutes of the latest meeting reveal some voters were even considering whether the Fed Funds rate was restrictive enough to bring inflation back to target. This more hawkish tone was not as pronounced as when Fed Chairman Powell took to the press conference after the meeting. It clearly is a message that rates will stay higher for longer to cool inflation towards their target. Risk assets, equities and commodities have all corrected lower in response to the news. The AUDUSD has slipped lower as well and remains at the mercy of the US-dollar for the time being. Judo Bank PMI’s today may have a small impact during the Asia session. Elsewhere overnight, UK inflation came in at 2.3% which was lower than last, but was higher than economists had been expecting and subsequently pushes back the chances of a rate cut from the BoE. Prime Minister Rishi Sunak also called an election for the UK to be held on 4th July. For the AUDUSD, the structural support at 0.6645/55 has been surpassed and while we consider the pair to be at the bottom of the recent range, it could open up a look to 0.6580’s on any further deterioration, but with the technical indicators mixed , any strength will find initial resistance at 0.6650’s for the time being.
Wall Street stocks fell across the day after the latest release of the Fed Meeting Minutes, suggested interest rates in the US would remain higher for longer and dampened the enthusiasm for investors. The DJI fell -0.5%, the S&P500 lost -0.3% and the Nasdaq gave back -0.2% for the day. Australian shares are expected to open lower today following the Wall Street moves overnight.
Gold prices eased from recent highs, as traders softened their expectations of when the Fed will look to be easing rates later this year.
Copper prices dropped further as traders continue to be seen taking near-term profits from recent rallies. Iron Ore prices pressed on higher as prospects improve for ongoing demand to be supported by China initiatives.
Brent Crude prices retreated once again losing another -1% for the session, as the Fed minutes upset the expectations for a drop in interest rates any time soon, threatening the prospects for renewed demand.
| AUDUSD
Open today 0.6620 Yesterday’s Range 0.6608 / 0.6685 |
NZDUSD
Open today 0.6097 Yesterday’s Range 0.6083 / 0.6152 |
AUDNZD
Yesterday’s Range 1.0857 / 1.0946 |
| AUDEUR
Yesterday’s Range 0.6108 / 0.6154 |
AUDCNH
Yesterday’s Range 4.7940 / 4.8334 |
AUDGBP
Yesterday’s Range 0.5199 / 0.5254 |
We hope you have found our expertly curated MarketWatch analysis useful in navigating the ever-changing FX landscape. To enhance our services and make sure you receive the most relevant and timely insights we have recently made some exciting updates to our newsletter.
To continue receiving our curated MarketWatch insights, we kindly request you resubscribe to our mailing list here: https://bit.ly/46YKOdo
