The Aussie Dollar fell this morning as investors cut bets that the Reserve Bank of Australia will hike interest rates by 25 basis points at their next meeting following weak CPI data. AUD/USD dropped 0.9% on the news. As markets wait for the Fed’s decision this evening, EUR/USD is higher trading around 1.1070 and GBP/USD hovering at the 1.29 level. USD/JPY struggles to keep above 141, and it is now trading mid 140-141. The Bloomberg Dollar Spot Index advances 0.1%.
The Federal Reserve is poised to lift interest rates by 25 basis points to the highest level in 22 years to the 5.25%-5.5% range, while retaining a tightening bias that could lead to an additional move later this year. The market focus will be on Powell’s speech and to assess on how determined the central bank is to keep tightening this year, especially after inflation pressures declined last month which led investors to diminish expectations on further increases until the end of the year (against many FOMC members that are still expecting a last hike later in the year).
On other news, Oil trimmed a four-day rally as traders took stock of the advance and get prepared for the FOMC decision. In the UK, British billionaire Joe Lewis, owner of the Tottenham Hotspur football club, has been charged with insider trading in the US.
