Market news

15 December 2021

AUD/USD bulls stampeed despite hawkish Fed, Aussie jobs eyed

  • AUD/USD bulls take charge despite hawkish Fed.
  • AUD/USD traders await the Aussie jobs data for more volatility.

AUD/USD at 0.7173, is ending the day around 0.95% higher after travelling from 0.7092 and 0.7177 over the build-up and around the Federal Reserve event.

The AUD ended a choppy session firm despite an uber hawkish Fed. Treasury yields rose across the curve after the Fed announced an acceleration of tapering and a dot plot showing a more aggressive rate hike outlook. ''Expect this selling pressure to flow through to local rates markets at open before attention turns to RBA’s Lowe later this morning,'' analysts at ANZ Bank explained. 

The hawkish message from a faster taper was amplified by significant upward revisions to the dot plot. However, much of what was announced had already been priced in and the US dollar turned on a dime and ended the day lower.  For instance, the removal of “transitory” and the doubling of the taper had already been fully expected. What was unexpected, the dots were particularly striking. The median dot signals that there is expected to be three hikes next year, one more than previously indicated. 

Meanwhile, investors moved back over toward risk-on assets after the Fed announcement, with US stocks reversing earlier losses to touch a session high. This supported the Aussie, setting it up for a positive start for what could be another busy day. Markets have become more optimistic that Omicron will not impede the global economic recovery.

Additionally, analysts at ANZ bank explained that ''pledges from China to support economic growth also helped alleviate some of the fears. Markets now expect further monetary policy easing in China after the People’s Bank of China said it will reduce bank reserve requirements.''

Meanwhile, traders are waiting for the Reserve Bank of Australia, Governor Phillip Lowe, will speak. Also, we will have the Aussie jobs data.  A big gain in employment seems inevitable in November, analysts at ANZ bank said.

''Just how big is the question.''

''We expect a rise of 240k but the range of forecasts is wide. The impact on the unemployment rate will depend on how quickly participation picks up compared with employment. Our pick is 5.0%, down from 5.2% in October, but it could go either way.''

 

Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

Open Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2022 Teletrade-DJ International Consulting Ltd

Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Choose your language/location