The AUD/USD is capped by weakened sentiment ahead of Fed’s decision. Now the pair is trading close to 0.6935, after hitting a 0.6983 daily high, but tumbled as sentiment deteriorated during the day, reaching a daily low at 0.6921, before settling at current price levels.
Many factors worth stating weighed on the Aussie’s market sentiment. Walmart cut its profit outlook in the year ahead and mentioned double-digit inflation in food prices as one of the reasons, dragging US equities lower. That, alongside EU countries agreeing to reduce gas consumption while Russia reduces gas flows to Europe, increased the chances of the bloc getting into a recession.
The Australian economic docket will feature CPI figures, awaited to increase more than the RBA’s forecast, as TDS analysts wrote. “Our headline forecast implies the peak is likely to exceed the RBA’s 7% year-end target, warranting at least a 50bps Aug policy rate hike. We see upside risks to our forecast.”
On the US front, the US economic docket will feature the Durable Good Orders, Retail Inventories, and Pending Home Sales ahead of the FOMC monetary policy decision.
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