Marketwatch APAC

Daily Insights
July 27, 2023

The US-dollar eased lower after Fed Chair Powell’s comments in his accompanying statement, to the committee’s decision to raise rates to the 5.25-5.50% range, 25bp. Powell says the Central Bank will continue to decide policy on a meeting by meeting case and upcoming data will inform decisions. He also noted that either a hike or steady policy will be the tone for the September meeting. So pretty much the same message as the last meeting. The AUDUSD has clawed back some of its intraday losses resulting from a surprise drop in inflation data which would assume the RBA has room to pause next week. Some economists, however, still note that the inflation rate is well above the central bank’s target and looking for them to keep policy tight for one more hike if they are to curb the consumer pressure. Also helping the AUDUSD has been the murmurs from China to increase support for their economy, since it is one Australia’s leading trade partners. For today, traders will look to any retreat to find first support at 0.6725, while resistance at 0.68-cents continues with further supply at the 0.6840/50 level behind. The ECB Meeting tonight will be the key event for markets today.

Wall Street finished a mixed trading session after the Fed raised interest rates by a much expected 25bp and the risk market responded to Powell’s comments as a dovish outlook, saying further policy was data dependent at future meetings. The DJI was up 0.25%, the S&P500 closed flat and the Nasdaq closed lower, shedding 0.1% for the session. Australian shares look to open flat today, as investors digest yesterday’s inflation dent and the overnight move by the Fed to raise rates once again.

Gold prices moved higher, as the US-dollar and US Treasury yields eased and investors contemplated Fed Chairman Powell’s latest comments.

Copper prices have eased today, as traders fail to see any follow through on Beijing promises to support their economic recovery. Iron Ore prices traded higher for the day, as traders welcomed China’s pledge for more stimulus to support their struggling economy, though concerns about overall steel demand has been capping gains.

Brent Crude Oil prices dropped 1% following US crude inventories falling less than expected and the move by the US Fed to raise rates by another 25bp that could hinder demand outlook.

Economic Calendar

EUR - Main Refinancing Rate
EUR - Monetary Policy Statement
USD - Advance GDP q/q
USD - Unemployment Claims
EUR - ECB Press Conference

Market Indicators

Currency Pairs
Pair High Low
aud/usd 0.68211 0.66981
nzd/usd 0.62734 0.6172
aud/eur 1.64068 1.62786
aud/gbp 1.91242 1.90129
aud/jpy 95.418 92.959
aud/nzd 1.08982 1.084
usd/jpy 141.322 138.76
usd/cad 1.32428 1.31577
eur/usd 1.11495 1.09657
gbp/usd 1.29957 1.27693
Equities and Commodities
GOLD 1948.34
WTI 79.96
DOW 35346
Nasdaq 100 15572.2
S&P 500
ASX200 7428.05

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.

About Michael Buck


Michael Buck is part of GPS’ trade desk in Perth, Australia. He has worked in foreign exchange specializing in derivatives in London, New York and Australia. He has been both a trader at bank and has developed pricing and risk software solutions.