Market Update – 3rd May 2018 – U.S Fed Leaves Rates On Hold At 1.75% But Telegraph Increase Next Month

The U.S Federal Reserve left rates on hold overnight at as U.S inflation reached 2%. Markets had penciled in no rate hike last night with the next move from the Fed likely to be during the June meeting with a further 25 basis point increase to 2%. The U.S Fed has been pretty good over the last year or so about telegraphing their interest rate moves in a bid not to surprise the market and cause unwanted volatility. AUD/USD is therefore not surprisingly little changed from yesterday but remains just below the 0.7500 level on the wholesale market. U.S stocks fell about 0.75% while European equities moved higher.

Commodities prices remain on the back foot but all still look set to move higher as inflation and global growth picks up around the world. As I’ve said before commodities and the Aussie dollar move quite symmetrically as such probably expect any increase in growth and commodities prices to flow into a stronger Aussie dollar. However over the short term with the U.S raising rates it would appear we would be best to expect lower levels vs. the Greenback and perhaps also the Euro where growth is picking up.

Local trade balance and building approvals numbers are out today, so potentially a bit more volatility for the Aussie ahead today.


AUD/USD – 0.7491

AUD/GBP – 0.5517

AUD/EUR – 0.6265

AUD/NZD – 1.0707

AUD/JPY – 82.276

USD/BTC – $9,203


All Ords (XAO) – 6,136

Gold – A$1743/oz

Silver –  A$21.88/oz

WTI – US$67.66/barrel


AUD – Trade Balance & Building Approvals at 11.30am

GBP – Services PMI at 6.30pm

USD – ISM Non-Manufacturing PMI at midnight

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 




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