AUD/USD downside continues, now in 0.7130s after hawkish Fed’s Waller comments


  • AUD/USD has continued to decline in recent trade and is now in the 0.7130s, down 0.7%, after hawkish Fed rhetoric.
  • Fed’s Waller said the whole point of the Fed’s QE acceleration was to make the March meeting live for lift-off.

Recent downside momentum in AUD/USD has continued throughout US trading hours spurred primarily by a broad pick up in USD strength in wake of hawkish Fed commentary. The pair is now trading in the 0.7130s, down about 50 pips or 0.7% on the session and now down about 1.2% from earlier weekly highs hit in the 0.7220s on Thursday after the Fed’s monetary policy announcement.

Influential Fed board member Christopher Waller said that the "whole point" of the Fed's decision to accelerate the pace of its QE taper was to make the March Fed meeting "live" for a first rate hike. A hike in March, he said, was now his base case, although he could see the hike pushed out to May. According to the CME Fed Watch, markets are now pricing a roughly 50% chance that the Fed hikes rates by 25bps to 0.25-0.50% from 0.0-0.25% in March.

The comments come after the Fed doubled the pace of its QE taper earlier in the week, the new dot plot showed consensus expectations on the FOMC was for three rate hikes in 2022 and Chair Jerome Powell outlined a bullish view on the economy and labour market. Waller and other Fed speakers who have appeared (Mary Daly) since the Fed meeting stuck to this bullish economic view, but Waller was much more explicit on the potential timing of future Fed policy moves.

The Aussie’s losses on Friday, which have also been compounded by a broadly risk-averse market mood, have taken AUD/USD back to roughly in line with its pre-Fed meeting levels. Bears will likely be eyeing a potential test of this week’s lows under 0.7100 if the dollar can continue to strengthen into next week on hawkish Fed vibes and if risk appetite remains ropey.

AUD/Usd

Overview
Today last price 0.7134
Today Daily Change -0.0047
Today Daily Change % -0.65
Today daily open 0.7181
 
Trends
Daily SMA20 0.7145
Daily SMA50 0.7303
Daily SMA100 0.7305
Daily SMA200 0.7472
 
Levels
Previous Daily High 0.7225
Previous Daily Low 0.7144
Previous Weekly High 0.7188
Previous Weekly Low 0.6995
Previous Monthly High 0.7537
Previous Monthly Low 0.7063
Daily Fibonacci 38.2% 0.7194
Daily Fibonacci 61.8% 0.7175
Daily Pivot Point S1 0.7142
Daily Pivot Point S2 0.7103
Daily Pivot Point S3 0.7062
Daily Pivot Point R1 0.7223
Daily Pivot Point R2 0.7264
Daily Pivot Point R3 0.7303

 

 

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