Australian Dollar (AUD) Exchange Rate To Change In The Near Future!? | Australia with further rate hikes on the horizon | Conotoxia

Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The minutes of the Reserve Bank of Australia's May meeting were released today, where there was a 25 basis point rate hike to 0.35 percent, which was above the market consensus of a 15 basis point hike.

It was the first rate hike since November 2010. However, the central bank has announced further monetary tightening in an effort to counter rising inflation. The central forecast for Australian GDP is for growth of 4.25 percent in 2022 and 2 percent in 2023. Household and business balance sheets are in good shape, a recovery in business investment is underway, and there is plenty of construction work lined up. Headline inflation is projected at about 6 percent in 2022 and core inflation at about 4.75 percent, before falling to about 3 percent by mid-2024. - according to the minutes released today. The RBA's attitude may affect the Australian Dollar (AUD). This morning the AUD/USD exchange rate is back above the 0.7 level, rising about 0.5 percent.

UK with better employment data

The number of people in work in the UK rose by 83,000 on a quarterly basis, well above market expectations of an increase of 5,000. Thus, the UK unemployment rate fell to 3.7% in Q1 2022, the lowest reading since 1974. The consensus was for a reading of 3.8%. For the first time since records began, the number of unemployed (1.257 million) is lower than the number of job vacancies, which reached a new record of 1.295 million.

Real regular wage growth in the UK was 2 percent lower than a year ago, the largest decline since Q3 2013. High inflationary pressures appear to be hurting consumer spending power. The GBP/USD is turning back from potential support at 1.2100 and is currently in the area of 1.2400. The good labour market situation may also cause the Bank of England to take a bolder approach to further interest rate hikes.


Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)

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Supply Trends Resurface: Analyzing the Impact on Market Dynamics

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