Fundamental analysis
09 November, 2018
Research Department
AUD/USD fell sharply from its multi- week low of 0.73006 to test a session low of 0.72346 as the U.S. Federal Reserve kept interest rates steady at 2.25% but reaffirmed its monetary tightening stance, setting the stage for a rate hike in December. The Fed has raised its key policy rate three times this year, and the market expects another rate hike in December on the back of a robust U.S. economy, rising inflation and solid jobs growth. The Aussie on the other hand is still seen under pressure as sentiment was dampened by worries about rising U.S.-Sino trade war tensions. China is Australia's largest trade partner and a weakening of sentiment toward China does not bode well for the Aussie dollar. In addition, the Aussie fell also pressure from negative Home Loans data for September. Data this morning showed that Home Loans fell 1.00% in September, amid expectations for a fall of 0.9%. Later this afternoon, investors could be expected to turn focus to PPI data for October in the US (13:30 GMT).
