Australian Dollar Forecast: Neutral
- The Australian Dollar jumped higher as the US Dollar sank
- A soft US CPI number saw risk assets soar across the board
- RBA disparity with the Fed approach might deliver different results
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The Australian Dollar bounced to its highest level in almost two months last week on the back a weaker US Dollar after US CPI printed below forecasts. Headline CPI was 7.7% year-on-year instead of 7.9% forecast and 8.2% previously.
The ultra-aggressive rate hikes by the Federal Reserve so far this year might be bearing fruit for the central bank in their fight against inflation.
The consequence is that the market now has hopes that the tight monetary policy in the US may not crush the economy while reining in price pressures.
The swaps and futures markets both have a 50 basis point hike priced in for the Federal Open Market Committee…
