- AUD/USD looks cautious prior to the US CPI release, as the downside bias is intact.
- Fed is in a tricky situation, what next for a rate hiking plan?
- Market forecasters are abating for a massive rate hike from the Fed.
AUD/USD is treading water in the early Asian session after hitting the 0.6700 mark in the last trading session. US Dollar Index (DXY) is on the softer side in early Asian hours, as the market awaits the United States (US) Consumer Price Index (CPI) data release on Tuesday.
AUD/USD has not capitalized much on the previous trading day in wake of the backstop provided by the Federal Reserve (Fed) and US Treasury. On Silicon Valley Bank’s (SVB) fallout and to cement any dent over the US banking system, the Fed came up with a backstop plan on Sunday, which prompted milder risk on the market environment during New York (NY) session on Monday.
Looking ahead, the market is heading into US CPI data with caution due to the numerous dynamic changes that occurred on Monday after the SVB fallout event. Many key market forecasters are rolling back their 50 basis points (bps) Fed rate hike expectation for 22 March.
Given the fact that higher borrowing cost across the globe is putting pressure on high-leverage business like tech companies, which are struggling to keep on with repayments on their debt amidst higher interest rate, therefore the banking system is facing a big problem with their non-performing assets.
Moreover, a continuously rising interest rate will likely hammer the banking system as per the aforementioned analogy. Hence the market is expecting no overstretching on the rate fronts.
However, elevated inflation levels are putting central banks into a tricky situation and acting like a double whammy for central banks.
The upcoming US CPI will be interesting to watch as it's only going to add more complexity for the Federal Reserve.
Levels to watch.
Recommended content
Editors’ Picks
EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.
GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.