12/5/2023 0 Comments 1 aud to usd![]() A return to positive territory would ease fears of a US hard landing and raise the threat of a Fed rate hike.Įconomists forecast the CFNAI to increase from -0.16 to 0.05 in September. The CFNAI considers 85 monthly economic indicators. On Monday, the Chicago Fed National Activity Index (CFNAI) will give investors a view of the US economy. However, solid US economic indicators and inflation numbers on Friday could change the narrative. Tight labor market conditions and consumer spending have supported a sticky inflation environment.Ī spike in US Treasury yields may have eased pressure on the Fed to push rates higher. However, there is a lingering chance of a December rate hike (22.3%). Last Thursday, Fed Chair Powell solidified market expectations of the Fed keeping interest rates unchanged in November.Īccording to the CME FedWatch Tool, there was a 0% chance of a Fed 25 basis point rate hike in November. ![]() Chicago Fed National Activity Index and the Fed in Focus An increase in geopolitical tensions would fuel a flight to the safety of the US dollar. The lack of indicators will leave the Middle East conflict in focus. There are no Australian economic indicators for investors to consider on Monday. Certain economies, including the Australian economy, may suffer from further price pressures and rate hikes. Higher oil prices could pressure central banks to hike rates to counter the likely impact on consumer prices. The RBA and other central banks will likely consider the risks of a regional conflict on inflation and the economy. Concerns about an escalation may continue to cap the upside for the AUD/USD. ![]() A pullback in consumer spending eases demand-driven inflationary pressures.īeyond the inflation figures, the Middle East conflict will remain a focal point. Higher interest rates raise borrowing costs, impacting disposable income and consumer spending.
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