- AUD/USD has shown recovery as the focus has shifted to US labor market data.
- RBA decided to keep interest rates steady as inflation has decelerated sharply to 5.8%.
- The US Dollar Index has turned sideways around 103.00 as investors are awaiting the release of the US labor market data.
The AUD/USD pair has delivered a V-shape recovery after dropping to near 0.6640 in the London session. The Aussie asset has recovered its entire losses inspired by an unchanged interest rate decision by the Reserve Bank of Australia (RBA).
S&P500 futures have posted marginal losses in Europe. US equities ended with nominal gains on Monday as shortened week due to a holiday on Tuesday on account of Independence Day has sidelined investors. The overall market mood is quiet ahead of the quarter result season which is expected to remain volatile due to higher interest rates by the Federal Reserve (Fed).
The US Dollar Index (DXY) has turned sideways around 103.00 as investors are awaiting the release of the United States labor market data for further guidance. As per the estimates, US Automatic Data Processing (ADP) private employment report is expected to disclose the addition of fresh 180K employees, lower than the former addition of 278K. The yields offered on 10-year US Treasury bonds have jumped to near 3.88%.
Meanwhile, the Australian Dollar has recovered some gains despite RBA Governor Philip Lowe maintaining the status quo. The street was mixed as one school of thought was favoring one more rate hike knowing the fact that Australian inflation is far from the desired rate of 2%.
While the other school believed that a steady monetary policy would be better as monthly inflation has sharply softened to 5.8% and the central bank would get some time to assess monetary policy conditions.
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