The Australian dollar continues its gains ahead of the Monetary Policy Committee meeting

The Australian dollar extended its recent gains, surpassing 0.66 USD and closing at its strongest level since January 15, driven by broad weakness in the US dollar following a weaker-than-expected US jobs report.

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The Federal Reserve

Brent Crude

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The weaker-than-expected non-farm payroll data, along with slowing wage growth and an unexpected rise in the unemployment rate, have led investors to accelerate their expectations for the Federal Reserve’s first rate cut from November to September. Moving forward,
investors are closely monitoring the upcoming Reserve Bank of Australia’s policy decision on Tuesday.
There is a high expectation for a hawkish stance, given the return of inflationary pressures.

The Federal Reserve

Federal Reserve officials’ statements after the interest rate decision.

After Federal Reserve Chairman Jerome Powell said he still expects inflation to decline this year, other Federal Reserve officials will take this week to express their views on the economy. Investors are keenly watching the Federal Reserve officials’ statements regarding their thoughts on the path and timing of interest rate reductions.

Starting Monday, investors will hear from Richmond Federal Reserve Bank President Tom Barkin and New York Federal Reserve Bank President John Williams, who recently provided an uncertain timeline for interest rate cuts.

On Tuesday, Minneapolis Federal Reserve Bank President Neel Kashkari will make statements,
following an interview last month that triggered market sell-offs when he speculated whether any interest rate cuts could occur at all this year amidst ongoing inflation.

Other speakers include Federal Reserve Governor Lisa Cook and Chicago Federal Reserve Bank President Austan Goolsbee. Their statements will follow the release of the Michigan consumer sentiment survey on Friday, which includes inflation data closely watched by Federal Reserve officials.

Brent Crude

Brent crude records its biggest decline in three weeks.

and Brent crude futures fell to $82.8 per barrel on Friday,
marking the biggest weekly drop in three months as investors reacted to weaker-than-expected US employment data and a slowdown in annual wage gains,
increasing bets that the Federal Reserve might implement its first rate cut this year in September.
Concerns about prolonged high interest rates that could weaken US economic growth have increased
after the Federal Reserve left interest rates unchanged earlier this week,
highlighting high inflation readings that could delay interest rate cuts.
High interest rates typically affect the economy and can reduce demand for oil.
In addition, geopolitical risk premiums related to the conflict between Israel and Hamas have diminished, as both sides consider a temporary ceasefire and engage in talks with international mediators.

The Australian dollar continues its gains ahead of the Monetary Policy Committee meeting

The Australian dollar continues its gains ahead of the Monetary Policy Committee meeting

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