Australian Dollar Forecast: Neutral
- The Australian Dollar found firmer footing on US Dollar debility
- The Fed look likely to raise by less than 75 bp while the RBNZ are adopting it
- The RBNZ might know something that the RBA doesn’t. Will it sink AUD/NZD?
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Trading Forex News: The Strategy
The Australian Dollar surged toward a 2-month high at the end last week as the US Dollar collapsed on the market perception of a change in Federal Reserve policy.
Federal Open Market Committee (FOMC) meeting minutes revealed what astute observers already knew. That is, ongoing rate hikes appear likely to be less than the four 75 basis point (bp) jumbo lifts seen previously.
The short-term interest rate market continues to price in a 50 bp bump up at the December Fed gathering. This hasn’t changed from prior to the last meeting.
Nonetheless, the market interpreted the minutes as a dovish tilt…
