FXTM information and reviews
IronFX information and reviews
Libertex information and reviews
FXCC information and reviews
Markets.com information and reviews
FxPro information and reviews
42 443.82

Aussie slips on RBA's dovish taper; dollar extends rebound

7 September 2021

The Reserve Bank of Australia stuck to its exit strategy from QE on Tuesday, pressing ahead with its decision to reduce bond purchases by $1 billion a week this month. However, the central bank postponed its next review of the weekly pace from November to February as it foresaw a slower recovery in the economy amid ongoing lockdowns across Australia.

RBA takes middle ground as Delta rages on

The Delta variant may not have completely put a spanner in the works for policymakers’ taper plans but with infections yet to peak and several more weeks to go before the government reaches its 70%-80% vaccination target, the RBA is worried the economy will not bounce back as quickly as from previous lockdowns.

The extension of the tapering timeline is slightly negative for the Australian dollar in the short term and the currency hit a low of $0.7402 versus the greenback earlier today. However, some investors were disappointed that the RBA didn’t abandon its tapering intentions altogether so today’s decision wasn’t as dovish as it could have been and explains why the aussie initially went up after the announcement. The bigger risk for the aussie is if tapering is protracted over an even longer period of time, which could push back the timing of the first post-pandemic rate hike from 2024 to 2025.

One down, two to go

The Bank of Canada is not expected to announce any changes to its taper path when it concludes its policy meeting tomorrow although there’s a risk the Bank might sound more cautious given the increasing evidence of slowing growth in many parts of the world.

However, markets are mainly focused on the European Central Bank this week amid mounting speculation that it will be the next to join the taper bandwagon when it meets on Thursday. The ECB is unlikely to draw up a detailed exit plan and will probably simply drop its pledge to buy bonds at a “significantly higher pace”. But investors will be looking for signs of any divisions within the Governing Council as well as for hints on when the big decision on how PEPP will be wound down should be expected.

The euro was last quoted slightly down on the day at $1.1864, while the Canadian dollar was 0.2% weaker against its US counterpart. Sterling also slipped for a second day as the dollar advanced broadly, with its index gaining 0.25%. The Fed could come back into the spotlight on Wednesday and Thursday when a number of regional presidents take to the podium. Their views post the soft August jobs report are bound to attract headlines but may not necessarily move the dollar much as it’s hard to see the consensus for November tapering shifting that easily.

Wall Street futures eye more records

Equity traders, meanwhile, are already betting on an unhurried pace of tapering by the Fed & Co and so the rally looks safe for now. Nasdaq futures were trading in record territory on Tuesday, though the gains were minor. European stocks were mostly in the red despite another strong session for Chinese and Japanese indices.

Better-than-expected trade figures out of China earlier today have brought some relief after a series of disappointing economic indicators out of the country lately. The strong exports showing in August should partly offset the hit to domestic consumption from the reimposition of some virus curbs. Nevertheless, there’s still plenty of caution in the air given the unpredictability of the constantly evolving virus situation.

By XM.com


Stocks bounce back after Evergrande panic
Stocks bounce back after Evergrande panic

As investors increasingly liken the Evergrande crisis with the collapse of the Lehman Brothers in 2008, they remain in the dark about the Chinese government's intentions...

21 Sep 2021

Oil Was Put on Hold
Oil Was Put on Hold

The oil price is falling after rallying before. Early in another September week, Brent is trading at $74.50 and has a lot of room to correct. The strong greenback...

20 Sep 2021

Dollar starts Fed week on front foot, stocks hit by Evergrande fallout
Dollar starts Fed week on front foot, stocks hit by Evergrande fallout

Fears of global contagion from the worsening crisis in China's property sector continued to weigh heavily on sentiment at the start of trading on Monday as markets...

20 Sep 2021

Dollar jumps, gold slumps, stocks nervous
Dollar jumps, gold slumps, stocks nervous

Worries that the US consumer is rolling over were dealt a major blow yesterday after the nation’s retail sales for August overpowered some gloomy forecasts. The retail sales...

17 Sep 2021

Energy is the play: how we get to $100 crude
Energy is the play: how we get to $100 crude

Natural gas futures in Europe and the UK are flying, while our natural gas (NG) CFD (the underlying is traded on the NYMEX) pushed over $5.60 and into 7-year highs...

16 Sep 2021

Are investors sleeping on systematic risk in China?
Are investors sleeping on systematic risk in China?

It’s time to talk about China. The situation is getting dicier as the nation’s second-largest property developer - Evergrande - is on the verge of default. Trading in the company...

16 Sep 2021

Forex Forecasts

OctaFX information and reviews
HotForex information and reviews
XM information and reviews
FXCM information and reviews
Vantage FX information and reviews
Vantage FX
Moneta Markets information and reviews
Moneta Markets

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.