FX News

FX Update – Central Bank Action

Market Overview

Key Points:

• Equity markets bounce back over 2% on the day taking risk currencies along for the rise
• Markets had previously priced in a 50-point hike today by the RBA, but this has changed to a 50/50-, 50- or 25-point hike
• Markets have turned from the view of speculating on a global recession to pricing one in
• Fed’s Williams sees inflation cooling but underlying pressures remain – global supply chain woes easing
• Japanese media are reporting North Korea have launched a missile and people in Hokkaido should seek shelter, Japan’s second largest Island
• Ukrainian troops take back four provinces in Ukraine after advancing several kilometres
• The British Pound (GBP) was the strongest currency last week while the US Dollar (USD) is the worst performing

Major Announcements last week:

  • German ifo Business Climate 84.3 vs 86.9 expected
  • US New Home Sales 685k vs 500k predicted
  • Eurozone Inflation expectations predicted to be 10.0% in September
  • US Consumer Sentiment 58.6 vs 59.5
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