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Currency Market Analysis

Sep 10, 2021 | Currency Market Analysis

Global Themes

10 September 2021

AUDUSD higher as central banks approach taper with caution

  • Fed, ECB moves weigh on currencies
  • Aussie weaker in other markets
  • ECB speech in focus

Greenback weakens as taper decision pushed back

The AUD was higher overnight as commentary from the European Central Bank and US Federal Reserve continued to suggest that slowing growth data had made policymakers more cautious.

In the US, key Fed board members John Williams and Raphael Bostic both said this week that a decision on winding back its bond-buying program would not be made at the 23 September meeting.

The USD eased on the news as bond yields fell from two-month highs.

The AUDUSD gained 0.1%.

European taper tapered

In Europe, the European Central Bank surprised markets, saying it would reduce its bond-buying program at last night’s policy decision but didn’t provide any details of the change.

The ECB said any reduction was an “administrative move” and was not a sign of tapering.

The euro moderately strengthened on the news. The AUDEUR was flat.

The Aussie was weaker in other markets with the AUDGP down 0.4% while the AUDJPY fell 0.5%.

ECB watched

Chinese loan data is due later today with the data to be watched after a recent drive to increase lending from the Chinese government.

ECB president Christine Lagarde speaks tonight.

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