Stephen Innes
SPI Asset Management
After a somewhat sluggish start to the week, Fed Dudley views on inflation confirm a unified Fed willing to look through the soft Q1 inflation print provided a spark to the dollar bulls. But given that Dudley’s public edict is almost always fully in sync with that of Yellen, anything other would have been the shocker. While the markets remain dollar bid tentatively, there remains an air of uncertainty on this move as the USD reality check is likely only one bad US economic data print away.
What had the makings of a very productive trading week for the Aussie dollar was dealt a blow after Moody’s downgraded a group of the leading Australian banks. Discussion around the downgrade has overshadowed this morning RBA minutes and with the USD trading buoyant on hawkish Fed speak, theses external developments should continue to weigh on near-term sentiment
Nonetheless, the Aussie remains supported on the dips as the downgrade reaction was far from an off the cliff scenario. And while credit rating agency negative downgrades can have a short-term impact, they seldom have a lasting influence on currency markets even more so given the market’s recent pivot to all things central banks which should remain the centre of attention throughout the day
Risk appetite appears to be holding firm after Wall Street’s strong performance overnight in Tech stocks and investors overall enthusiasm over the state of the US economy. This
Nothing too worrisome for Aussie bulls in this morning RBA minutes as the Central Bank’s views remain consistent and steady but worth noting the minutes did not take into consideration their views of the bumper Jobs report last week
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