February 07, 2023 10:27 GMT
AUD Higher For First Session in 4 as RBA Flag Need For Further Tightening
- AUD/USD sits higher for the first session in four following the RBA rate decision, at which the bank raised rates by 25bps to 3.35%, and hinted that another 50bps of rate rises could be still to come in an effort to rein in inflation. This puts AUD/USD close to a point off yesterday's lows at $0.6856 (showcasing a solid bounce off the 50-dma), with $0.6963 the next near-term upside level ahead of $0.7007, the 50% retracement of the early February downleg.
- GBP/USD traded a new weekly low of $1.1987 in Asia-Pac trade, putting the pair well within range of the 200-dma support of $1.1951. Any break through here opens the lowest level since early January, with focus turning to a potential party-wide reshuffle of the UK government. UK GDP, industrial production and trade balance data cross on Friday.
- Lastly, NOK is underperforming despite a more constructive crude oil price backdrop. EUR/NOK holds close to the cycle highs printed yesterday at 11.1086 - a break above here would mark the highest rate since November 2020.
- US and Canadian trade balance data are the calendar highlights Tuesday, ahead of an appearance from Fed's Powell, who speaks at the Economic Club. His comments will be carefully watched in the wake of the bumper jobs report as well as an observation from Bostic, who raised the prospect of a higher peak rate after the NFP data.