Post-FOMC Impulse Evaporates, AUD Seesaws On RBA Speak & Jobs Data

Commodity currencies traded on a softer footing, while the DXY blipped higher, in a marginal reversal of post-FOMC moves. Omicron concerns and Sino-U.S. tensions came back into focus, as the dust settled after yesterday's announcement from the Fed, who accelerated asset purchase taper and projected three rate hikes next year.

• AUD seesawed between gains and losses as the latest comments from Reserve Bank chief and Australia's blowout Nov jobs market report fed into RBA repricing. Gov Lowe noted that "we are still a fair way from" the point where the Board could raise the cash rate, which is not expected to happen next year. He outlined three scenarios for ending bond purchases in 2022, but stressed that decisions on QE will have no implications for interest rate moves. Lowe's remarks were weighed against strong labour market data, with all key metrics smashing expectations, as well as an uptick to consumer inflation expectations which reached near-decade highs.
• NZD was the worst performer in G10 FX space, printing worst levels after Stuff reported that New Zealand found its first case of the Omicron coronavirus variant in a managed isolation facility. New Zealand's Q3 GDP data were shrugged off, even as the quarterly contraction of 3.7% was smaller than expected by sell-side analysts (-4.1%), let alone the RBNZ's projection from the latest Monetary Policy Statement (-7.0%).
• The Fed inaugurated this week's crowded central bank marathon, set to resume later today with the announcements from the ECB, BoE, Norges Bank and several EM institutions (click the name of a bank to see our preview). Separately, flash PMI readings from the EZ as well as U.S. weekly jobless claims & industrial output take focus on the data front.