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AUD/USD’s decline has gathered extra pace on Wednesday, with the pair slipping back to levels last seen in early August in the low 0.7000s. The continuation of the bearish tone in the pair has come on the back of the strong upward trend in the Greenback, underpinned by rising bets for extra tightening by the Fed. Moving forward, the jobs report will gather all the attention on the domestic calendar.
USD/JPY hovers around mid-157.00s in the Asian session on Wednesday, near two-week highs touched last Friday as the BoJ's dovish rate hike continues to undermine the Japanese Yen. Meanwhile, the US Dollar remains firm amid the Fed's hawkish stance, adding support to the pair, though JPY intervention fears cap further gains. Markets pay little heed to the completion of the round of US-Iran indirect talks ahead of Trump-Xi meeting.
Gold rapidly leaves behind two daily upticks in a row and comes under heightened downside pressure midweek. Indeed, the precious metal breaches below the $4,300 mark per troy ounce to reach weekly lows amid the marked recovery in the US Dollar and the generalised upbeat tone in the US money market.
The Federal Reserve has forecast its main reference rate unchanged through 2027, a year when higher shipping costs are likely still reaching US store prices. Shipping a container from Asia to the US costs more than four times what it did before the war with Iran began in late February. International Monetary Fund research puts the peak effect on shop prices roughly a year out, in 2027.
The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.
