The outlook for the Australian dollar as we head into tomorrow’s RBA meeting is still dim, with the Pacific Peso slammed back below the 68 cent level versus USD last week:
While market economists still can’t figure out a weekly chart with wide bands and hence confuse a rebound as a new rally, longer term market viewers can discern that the post COVID euphoria has been over for sometime now, as the boffins at Martin Place continue their failure at playing catchup with an aggressive Federal Reserve.
The USD is going great guns because the Fed is hell bent on destroying their own domestic inflation, regardless of the impact on other currencies or market flows and pressures, including commodity prices.
The problem for the Aussie dollar is that those prices – alongside the only other driver of the economy, property – are are all heading down with copper recently turning over:
Iron ore in a death spiral after its post NY exuberance has been all but clawed back:
And gold not far behind, now back down to its 2021 low:
Oil prices have failed to stabilise, with Brent crude well below the Ukrainian invasion highs, even as the Ruzzian’s accidentally turn the taps off to GAZPROM in Europe, as signs of a top are forming here:
While the Australian dollar might find a temporary bounce tomorrow on an expected 50bps rise by the RBA, it will not be lasting.