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AUD/USD bulls eye a run to the 0.72s
AUD/USD is trading at 0.7144 and has ranged between 0.7128 and 0.7157 so far in the Asian session following the Federal Reserve rally after the central; bank had its rates raised by 25bps to a range of 4.50-4.75% and signalled further rate hikes are appropriate.
BoE Interest Rate Decision Preview: The last 50 bps hike but not the end yet
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The Bank of England (BoE) is set to begin 2023 with yet another 50 basis points (bps) rate hike, with Governor Andrew Bailey hinting at further monetary policy tightening. The BoE will announce its interest rate decision at 12:00 GMT this ‘Super Thursday’, publishing the Minutes of the meeting and Monetary Policy Report (MPR) alongside.
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In a sign of economic stability, Japan’s Monetary Base (Year-over-Year) came in at -3.8 percent in January, above expectations of -6 percent.
The January report marks the fifth straight month of contraction in the Monetary Base, but analysts had predicted the figure to hit the -6 percent mark. The Japanese government has been actively trying to stimulate the economy with monetary easing policies and is putting further effort into driving consumer spending with increased infrastructure spending and tax cuts.
The Monetary Base is a measure of the money supply created by the Bank of Japan, and is one of the key indicators of the nation’s economic health. The contraction suggests that the Bank of Japan does not believe inflation will pose a threat in the near future, and is seeking to provide support to the economy in other ways.
The news comes on the heels of recent reports showing slight improvements in consumer spending, with Japan’s key index of consumer confidence rising to the highest level in 8 years in January. The increase was considered to be largely driven by a better job market and increased purchasing power.
While the contraction in the Monetary Base is still a sign of economic instability, the news that it is less severe than expected could be an indication that Japan’s economic situation might be improving. It is worth noting, however, that the contraction could turn out to be more severe in the coming months, so close monitoring of the economic situation is still advised.
