News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • RT @KyleR_IG: First gaslighting, and now the silent treatment. This isn't a healthy relationship.
  • NDRC halts activities under China-Australia economic dialogue [update via Bloomberg] - cites Australia's disruption of cooperations with China $AUDUSD slipping lower, falling to lows of the day, China is AU's largest trading partner, feeling disruption woes #AUD #NDRC https://t.co/xQ8W11UVL2
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Gold: 0.00% Oil - US Crude: -0.13% Silver: -0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/rO6XynukTE
  • The US Dollar still remains under pressure against most ASEAN currencies heading into May. A busy week awaits the Indonesian Rupiah, Thai Baht, Philippine Peso and Singapore Dollar. Get your market update from @ddubrovskyFX here:https://t.co/Ed95511S7Y https://t.co/8lJQ0eheXN
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.13% 🇦🇺AUD: 0.05% 🇪🇺EUR: 0.03% 🇬🇧GBP: 0.01% 🇨🇭CHF: -0.05% 🇯🇵JPY: -0.13% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/5vSj1gpuhD
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 89.94%, while traders in France 40 are at opposite extremes with 81.32%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/w9YlTeEscN
  • Dogecoin continues to trade higher with explosive energy, attesting to the cryptocurrency's new clout. Meanwhile, Bitcoin and Ethereum sink. Get your market update from @FxWestwater here:https://t.co/ohw714KqB2 https://t.co/7tbKUVpC3F
  • S&P 500 Index May Lead Nikkei 225 and ASX 200 Higher Amid Reflation Theme https://www.dailyfx.com/forex/market_alert/2021/05/06/SP-500-Index-May-Lead-Nikkei-225-and-ASX-200-Higher-Amid-Reflation-Theme.html https://t.co/7bBBmKeVUR
  • RT @Sonnenshein: ANNOUNCEMENT: We're excited to kick off our partnership with the @Giants making @Grayscale the first #crypto sponsor of an…
  • Natural gas prices moved higher, capturing a long-term trendline that could support the heating commodity's price in the coming weeks as colder temps support fundamental side. Get your market update from @FxWestwater here:https://t.co/tGUDJE9hn0 https://t.co/Wpu8eWHIXz
Australian Dollar Capped By US Rate-Hike Expectations

Australian Dollar Capped By US Rate-Hike Expectations

David Cottle, Analyst
Australian Dollar Capped By US Rate-Hike ExpectationsAustralian Dollar Capped By US Rate-Hike Expectations

Fundamental Australian Dollar Forecast: Neutral

  • The Australian economy is doing pretty well, with the mining sector in the vanguard
  • However, the Australian Dollar just can’t get back to last November’s peaks
  • It’s boxed in by interest rate differentials with the US and is unlikely to escape this week

The Australian Dollar failed to rise last week on the ostensibly quite bullish confirmation that its home economy had avoided technical recession and returned to growth in the final quarter of 2016.

There were two main reasons for this, one of which will probably bear quite heavily on the coming week’s trade too. So, let’s deal with the other reason first. While Australia’s third-quarter growth contraction was a shock, the economic data investors have seen since made it quite clear that it was also something of an aberration.

Indeed, even the Reserve Bank of Australia had been wont to say as much. So last week’s news of GDP growth was widely expected and confirmation didn’t bring out many more Aussie buyers.

The other more pertinent reason for the currency’s failure to rise arguably has more to do with the Federal Reserve than anything closer to home. In the past week, Fed speaker after Fed speaker has chosen to hold forth on the propriety of raising interest rates sooner rather than later. Even usually-measured governing board member Lael Brainard said last Wednesday that rates could rise “soon.” San Francisco Fed chief John Williams sang from a similar hymn sheet on Thursday, and these two are only the latest voices in a growing, hawkish chorus.

By contrast the RBA has been at pains to let the market know that, while Australian rates might not fall again from their record lows anytime soon, they probably won’t be rising very quickly either. The central bank’s position appears to be that, while Australia’s mining industry is doing exceptionally well, thanks as ever to China, there are still some clouds over domestic demand, and the domestic economy more generally.

Until they clear, if they clear, rates are likely to stay put. That leaves the interest-rate-differential backdrop squarely in the greenback’s favour, which is probably why AUD/USD has been unable to retake the highs it scaled before last November’s US Presidential vote. Even if US rates don’t go up this month, the Fed’s basic expectation remains that it will make three, quarter-percentage-point increases this year.

Now of course this week will bring a monetary policy decision from the RBA, on Tuesday. But it is not expected to alter its interest rate setting nor to depart from the cautious tone it has been striking all year. That could leave Aussie bulls with nowhere much to go even as the market as whole awaits the month’s most important interest rate call; March 15’s date with the Fed.

Still short of the highs: AUD/USD

Australian Dollar Capped By US Rate-Hike Expectations

Chart Compiled Using TradingView

Would you like to know more about trading the financial markets? Take a look at the DailyFX trading guide.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter:@DavidCottleFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES