FX News

FX Update: Markets Await Midterm Election Results

Market Overview

Key Points:

• US midterm elections are in progress with predictions the Republicans will take over the House of Representatives, meanwhile the race for the Senate is tight
• The Reserve Bank of New Zealand Monetary Policy Review this morning suggests the high inflation could have been lessened if Ore had hiked earlier
• Some analysts are suggesting the Fed may take interest rates all the way to 6.0% before starting to ease.
• Russia has ordered the withdrawal from the city of Kherson, a major victory for Ukraine which will make it harder for Russia to push west, some think this could be a game plan before the Russians destroy the Dnieper River Dam- the biggest Hydro station in Ukraine.
• The German economy is predicted to contract 0.2% in 2023
• RBA’s Bullock spoke yesterday saying further rate hikes will be required – data dependant
• China has again extended their support for struggling property developers by boosting the 2018 program to 250B Yuan
• The Swiss Franc (CHF) is the strongest currency this week while the New Zealand Dollar (NZD) has been the worst performer.

Major Announcements last week:

  • NZ Unemployment rises to 3.3% from 3.2%
  • RBA raises interest rate to 2.85%
  • Federal Reserve raises cash rate 75 points to 4.0%
  • Bank of England cash rate rises 75 points to 3.0%
  • Canadian Unemployment drops to 5.2% from 5.3%
  • US Non Farm Employment 261k vs 197k predicted
  • US Unemployment rises to 3.7% from 3.6%
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