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• The US Greenback Index rises near a 2-week excessive because the Federal Open Market Committee’s assembly approaches.
• US inflation struggles to drop under 3.00% for 9 consecutive months. Traders are eager to listen to whether or not the Fed is contemplating 3 rate of interest cuts or much less.
• Traders will scrutinise tomorrow’s assertion and press convention to find out if the Fed will hike in June 2024.
• Gold declines throughout this morning’s Asian session however doesn’t type greater than a retracement and descending triangle.

AUDUSD – RBA Retains Curiosity Charges Unchanged!

The AUDUSD at the moment has the bottom unfold amongst the “main foreign money pairs” class and has fallen to its lowest worth since March sixth. The Australian Greenback is the worst performing foreign money of the day and is declining in worth towards the Yen, GBP, NZD and Euro. The AUDUSD has fallen 0.77% to date immediately which is greater than most different pairs and it’s a pair which isn’t conflicting when it comes to particular person worth motion.

The Reserve Financial institution of Australia stored their rate of interest unchanged throughout this morning’s fee resolution. The Governor’s Press Convention was as anticipated and suggested “all choices stay on the desk”. This implies the regulator can be pleased to hike if wanted in addition to lower if inflation continues to say no. Economists noticed the feedback from the Governor as barely extra dovish as she stated, “We’re making progress in our combat towards inflation, however it does stay excessive”. Some economists deemed this as sufficient to take hikes off the desk. Most economists proceed to imagine the RBA will lower later within the yr, more than likely after the Fed, ECB and BoE.

The alternate fee will primarily be pushed by the Fed’s Fee Choice and Press Convention tomorrow night. Along with this, the pair will even see volatility when Australia releases its employment knowledge on Thursday. Australia’s employment knowledge is believed to indicate resilience because the unemployment fee barely falls to 4.1% and employment change rises to a 3-month excessive.

The US Greenback Index has been rising in worth for six consecutive hours as we transfer away from the Asian session into the European. Merchants are taking a critical take a look at the AUDUSD for 3 essential causes: greater volatility, non-conflicting worth motion amongst the 2 currencies and the low unfold. Non-conflicting worth motion means one foreign money is growing towards all currencies whereas the opposite is reducing. Pattern and momentum indicators point out a bearish development, whereas assist ranges stay 0.35% under the present worth.

XAUUSD – Will The Fed Nonetheless Think about 3 Fee Cuts In 2024?

The worth of Gold is being pressured by two components: the rise within the worth of the US Greenback and the extra enticing Japanese Yen. Each are protected haven property and are competing with Gold for investments. Nonetheless, the XAUUSD’s worth is greater than a descending triangle sample. A descending triangle sample is thought to be a “neutral-bearish” sign and types nothing greater than a retracement.

The worth will largely rely on tomorrow’s Federal Reserve’s assertion and press convention. The difficulty is that the Federal Reserve have been unable to push inflation under 3.00% over the previous 12 months which is longer than they’d have preferred. Producer inflation additionally continues to develop which signifies inflation will even stay excessive in March. Including to the issues is the rise in Oil which fuels inflation. If oil rises an additional 1.15%, it should commerce at highs seen in October 2023.

If the Federal Reserve push again rate of interest cuts and point out much less cuts than beforehand thought, the value of the Greenback can rise, and traders could quickly scale back publicity to Gold. In line with the Fibonacci ranges, a longer-term retracement can see the value decline to $2,064 to $2,089. Nonetheless, that is if the Fed decide to develop into extra hawkish.

Michalis Efthymiou

Market Analyst

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