The Australian Dollar (AUD) continues to be spanked, running to 0.7040 this morning, taking on its 5th week of declines against the US Dollar (USD) reaching an early February low. The big Dollar has simply outperformed across the board of currencies ever since the Fed started speaking of hiking rates based on improving data. The Fed will undoubtedly hike early Thursday from 0.50% to 1.0%, this has already been priced into currency movement of late but what will be telling is an announcement of a balance sheet contraction of sorts. What’s interesting as I have said previously is that if inflation has indeed peaked and the Fed starts raising interest rates at a fast pace, they could in turn cause deceleration of growth and a potential recession. With the data releasing this week this cross could go anywhere, our pick is a retest of 0.7150.
Current Level: 0.7083
Last Weeks Range: 0.7052-0.7247