The Fed did exactly what the market expected by lifting rates by 25 basis points.
However, what caught the attention of Senior Corporate Dealer Patrick Idquival, was that there was an expectation of a rate hike for at least the next 3 meetings. He says despite what most people would assume, Ebury typically sees positive moves for the Australia dollar during a hiking cycle from the Fed, and he says hopefully the AUD can consolidate its position here at 0.7300. Patrick says a drive to the mid 0.7500 is consistent with his view on the AUD from the end of last year. He says we’re going to see an acceleration of monetary policy tightening across the globe from central banks with the goal of getting in front of inflation pressures and the rise of oil and energy prices have not helped the cause for this. Adding to Australian dollar strength today was a positive jobs figure as well unemployment, which is down to 4%.
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