Australian dollar hinges on one word

Open demo account
FOREX trading implies serious risk and can result in the loss of your invested capital

Financial and commodity markets analytics

The Australian dollar is trading higher today’s trading session which is suprising given that local data today hit the market below expectations which points to the fact that external forces may be the key driver of the Aussie dollar in the nearest future.

Import export and trade balance figures released earlier today all came in lower than analysts’ forecasts but the Australian dollar bucked the trend by moving higher which may be in anticipation of what may happen later today when the US Federal Reserve release their latest interest rate decision followed by a monetary press conference.

The market has placed a more than 90 percent chance that the Fed will raise interest rates by 25 basis points so with this already priced in to currency markets, the main interest will be on the following monetary statement.

Analysts Macquarie Bank believe it may come down to a single word from the Fed whether the Aussie dollar sinks or swims with that word being “accommodative”

Gareth Berry and Thierry Wizman, Macquarie Bank.

 “With a hike fully priced in, the market reaction could hinge on whether policy settings are still described as ‘accommodative’ afterwards,” said Gareth Berry and Thierry Wizman from Macquarie Bank.

They believe if this word is removed from the Fed’s monetary statement that could be a sign that the central bank is hesitant about the amount of  further rate hikes that need to be delivered and as a result the Australian dollar may rally.

“Dropping that key phrase would suggest neutral policy settings are coming into view, which could be interpreted as a dovish development,” they added.

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Fibo Markets

FIBO Markets Ltd. (ex. FIBO Group Holdings Ltd.) is authorized and regulated by the CySEC (licence no. 118/10) and operates in accordance with the Markets in Financial Instruments Directive (MiFID) of the European Union.

Unfortunately, our services are not available to individuals residing in Canada, the United States of America, North Korea, Iran, Iraq, Israel, Australia, Belgium, or Japan.

29 Agias Zonis, 1st Floor, 3027, Limassol, Cyprus

© 1998—2023 FIBO Markets Ltd. (ex. FIBO Group Holdings Ltd.)

IMPORTANT: Please be informed, that our services are available for Professional Clients only. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Please note that our services are provided only to the residents of the following counties (in alphabetical order): Austria, Bulgaria, British Virgin Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Kazakhstan, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Oman, People's Republic of China, Poland, Portugal, Romania, Russia, Slovakia,Slovenia, Spain, Sweden, Ukraine, United Arab Emirates.

Please feel free to contact out Support in order to get further assistance.