The latest FOMC minutes suggest the U.S Federal Reserve is edging closer and closer to another rate hike thanks to a buoyant jobs market and as inflation nears the FOMC’s target of 2%. Unemployment is also seen as dropping towards 4.5% as the Obama legacy continues well into 2017. AUD/USD however doesn’t seem to be taking any notice with the currency pair barely moving following the FOMC minutes, in fact if anything it might be marginally higher than this time yesterday. (Typically we should see the U.S Dollar rally on bullish minutes from the FOMC).
Locally yesterday a speech from RBA Governor Lowe was optimistic with the incoming Governor expecting growth to maintain around 3% over the next few years, which would be a bit faster than the previous estimates in place. Obviously this bodes well for the local economy, but also means higher interest rates are also likely. How this impacts on Australia’s ballooning private debt and massively geared home owners remains to be seen, but I think the next few years will be telling.
Ahead today is local private capital expenditure figures.
DATA RELEASES TODAY:
AUD – Private Capital Expenditure at 11.30am
AUD EXCHANGE RATES:
AUD/USD – 0.7676
AUD/GBP – 0.6154
AUD/EUR – 0.7261
AUD/NZD – 1.0711
AUD/JPY – 87.141
***Above rates are indicative wholesale rates and intended as a guide only***
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Patrick Downes
Senior Corporate FX Dealer
Compass Markets
Phone Patrick – 0431 278 632
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