Australian Dollar Drops On Hawkish Fed Remarks
January 09 2023 - 11:27PM
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The Australian dollar fell against its major counterparts on
Tuesday, as comments from U.S. Fed officials indicated that the
central bank will have to keep raising rates to somewhere above 5
percent.
Two Fed officials suggested that the central bank should raise
rate to a 5% to 5.25% range to bring down inflation.
Federal Reserve Bank of San Francisco President Mary Daly and
her Atlanta equivalent, Raphael Bostic both remarked overnight that
the Fed funds target rate would rise above 5% by the middle of the
year.
Traders look ahead to US Fed Chair Jerome Powell's speech at a
central bank conference in Stockholm later in the day and the U.S.
December inflation report due on Thursday for additional clues on
interest the rate outlook.
Oil prices slipped after three consecutive sessions of
gains.
The aussie depreciated to 0.6885 against the greenback and 90.86
against the yen, down from its prior highs of 0.6928 and 91.30,
respectively. The aussie may locate support around 0.66 against the
greenback and 86.00 against the yen.
The aussie weakened to 4-day lows of 1.5577 against the euro and
1.0820 against the kiwi, off its early highs of 1.5500 and 1.0858,
respectively. The next immediate support for the aussie is seen
around 1.57 against the euro and 1.06 against the kiwi.
The aussie was down against the loonie, at a 4-day low of
0.9229. The aussie is poised to find support around the 0.90
level.
Looking ahead, at 9:00 am ET, Federal Reserve Chair Jerome
Powell will participate in a panel discussion titled "Central bank
independence and the mandate - evolving views" at the Riksbank's
International Symposium on Central Bank Independence, in
Stockholm.
U.S. wholesale inventories for November are scheduled for
release in the New York session.
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