Fed's Powell Stays Patient on Rate Cuts

AUD

AUD opens mixed against majors, with no major data coming out over the past 24 hours. The ASX 200 finished yesterday flat as gains in industrials and info tech found equilibrium with loses in health care. Japan’s Nikkei was closed yesterday for National Foundation Day, while China’s Hang Seng and Shenzhen struggled -1.1% and -0.5%. Yesterday, Westpac Consumer Sentiment edged up to 92.2 from 92.1. The consumer mood improved material over the second half of 2024 but has stalled in the last three months as pressures continued on family finances. NAB business confidence improved despite business conditions declining in January. Trading conditions and profitability eased, while employment rose marginally. Nothing set for release today. Tomorrow, we'll see Inflation Expectations from the Melbourne Institute.
 

USD

AUDUSD saw marginal gains yesterday, with the pair flirting with the 0.63 barrier, opening this morning at a rate of 0.6292. Wall Street finished the day mixed with Dow Jones closing up 0.3%, S&P 500 up 0.1% and the Nasdaq down 0.2%. No major data overnight, while Fed Chair Powell began testifying before the Senate Banking Committee. He noted the central bank is in no rush to cut rates again, with the economy being "strong overall", with low unemployment and inflation that remains above the Fed's 2% target. Tonight, we have consumer price inflation data with a 0.3% rise in headline and core measures expected. This would leave the year-on-year rates unchanged at 2.9% and 3.2%. President Trump's tariffs could get only more complicated from here and act as an inflationary counterweight to an otherwise disinflationary trend.
 

EUR

AUDEUR saw a slight drop from yesterday, opening at 0.6074, holding steady with no big data coming out overnight. European equities were up with DAX +0.6% and CAC +0.3%. Italian Industrial Production comes out tonight, forecasted at -0.1%, with nothing else set to release overnight. Overall, the Euro remains softened as the weekend announcement over steel tariffs hit the Euro first. The EU is now bracing for other sectors to be tariffed.
 

GBP

AUDGBP peaked at 0.5091 and has steadily decreased to open at 0.5057. The FTSE closed up at 0.1%. A bit of movement seen with MPC Member Mann speaking on her fear of demand conditions weakening and corporate pricing power looking to follow the same route. No major data coming out today though will see MPC Member Greene speak overnight. Regarding the Bank of England, after cutting the rates last week they are seen likely pausing at the next meeting in March.
 

NZD

AUDNZD opens at 1.1124, having gradually risen since February 3 with both currencies heavily impacted by Trump's ongoing tariff conversation. No data out this week yet with the big data point of the week being Inflation expectations q/q coming out Thursday.