What are your thoughts on AUDUSD Fam....
The Australian dollar is trending higher and its rise may accelerate following hawkish messages in the Reserve Bank of Australia's November meeting minutes and comments by Governor Michele Bullock.
The AUD/USD has risen nearly 5% from its Oct 26 low at 0.6271 on the back of a broadly weaker U.S. dollar, rising iron ore prices and bounce in global equity markets.
These moves have been largely fuelled by the market's belief that the U.S. Federal Reserve has ended its tightening cycle and will be easing policy in 2024. nL1N3CF1F8
The dovish view of the Fed outlook is in stark contrast with signals sent by the RBA on Tuesday. The minutes from the November meeting, when the RBA hiked rates by 25 basis points to 4.35%, suggested the central bank stood ready to hike again.
While the RBA remains data-dependent, the minutes clearly indicated it is wary of upside risks. The RBA noted demand was still outstripping supply and rising home prices suggested financial conditions were "not especially restrictive". Perhaps most tellingly, the RBA's inflation forecasts were predicated on one or two more rate hikes.
Bullock chimed in with the hawkish message at a panel discussion, saying inflation would remain a challenge for the next few years. nS9N38P004 She also fretted over inflation expectations and still-strong demand.
The AUD/USD has risen nearly 5% from its Oct 26 low at 0.6271 on the back of a broadly weaker U.S. dollar, rising iron ore prices and bounce in global equity markets.
These moves have been largely fuelled by the market's belief that the U.S. Federal Reserve has ended its tightening cycle and will be easing policy in 2024. nL1N3CF1F8
The dovish view of the Fed outlook is in stark contrast with signals sent by the RBA on Tuesday. The minutes from the November meeting, when the RBA hiked rates by 25 basis points to 4.35%, suggested the central bank stood ready to hike again.
While the RBA remains data-dependent, the minutes clearly indicated it is wary of upside risks. The RBA noted demand was still outstripping supply and rising home prices suggested financial conditions were "not especially restrictive". Perhaps most tellingly, the RBA's inflation forecasts were predicated on one or two more rate hikes.
Bullock chimed in with the hawkish message at a panel discussion, saying inflation would remain a challenge for the next few years. nS9N38P004 She also fretted over inflation expectations and still-strong demand.