Australian Dollar Forecast: US Dollar Crunch Strengthens the Aussie

FORECAST OF THE AUSTRALIAN DOLLAR: NEUTRAL

  • The US Dollar fell while the Australian Dollar rose.
  • Risky assets increased worldwide as a result of a weaker US CPI report.
  • The Fed’s strategy differs from the RBA’s, which might lead to divergent outcomes.

Due to a weaker US Dollar last week due to US CPI printing lower than expected, the Australian Dollar rose to its highest level over two months. Instead of the forecasted 7.9% and the prior 8.2%, the headline CPI was 7.7% year-over-year.

The Federal Reserve‘s aggressive rate increases this year may be helping the central bank in its battle against inflation.

As a result, the market is currently encouraged by the possibility that the US’s strict monetary policy would contain price pressures without crushing the economy.

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