U.S. currency five-dollar bills
Sheets of former U.S. President Abraham Lincoln on the five-dollar bill currency are seen through a magnifying glass at the Bureau of Engraving and Printing in Washington March 26, 2015. Reuters/Gary Cameron

Bell FX Currency Outlook: The Australian Dollar fell below USD 0.7600 as the USD consolidated on a busy Friday night, following the FOMC’s meeting last week.

Australia: The USD found traction following a torrid week, as University of Michigan inflation expectations came in higher than expected and in turn, reversing the fall from the beginning of the year. Markets have settled it seems, and it’s a easier to absorb the Fed’s decision and accompanying dovish comments. The Fed has stated the pace of tightening would be data dependent. However this is in question, as data has been healthy, yet fewer hikes are now being mooted. The global backdrop is well and truly on their mind, and it is not only the Fed that is concerned. So the adjustment in market sentiment to interest rate settings leads to one feeling the USD fall is slowing, and may have even halted for now. There are no local events to drive the AUD today, but markets await Governor Stevens’ speech tomorrow in a holiday-shortened week.

Majors: The USD consolidated broadly on Friday, with markets noting the pick-up in Michigan inflation expectations. GBP was weighed down by political issues. EUR declined as the ECB signalled rates could go further. ECB Chief Economist Peter Praet was quoted in an interview saying that “we have not reached the physical lower bound” with regards to interest rates. This pushes back against ECB President Draghi last week who conceded that the ECB was unlikely to cut rates further. PBoC Governor Zhou Xiaochauan stated that “lending as a share of GDP, especially corporate lending as a share of GDP, is too high”. Japan will be closed for a public holiday today.

Economic Calendar 21 MAR

  • CH MNI Business Indicator Mar
  • US Chicago Fed Nat Activity Index Feb
  • US Exisiting Home Sales MoM Feb
  • US Fed’s Lockhart Speaks on US Economy

Bell Fx

[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily