Fundamentals
On Tuesday, the market risk appetite continued to heat up, as the market's concern about Omicron virus continued to weaken, and basically ignored the call of the Federal Reserve to end taper and raise interest rates in advance. The global stock market generally rose, driving the rise of risk currencies. Among them, the Canadian dollar continued to lead the rise driven by the soaring oil price, rising more than 130 points against the US dollar. However, the British pound failed to follow the rise, which may be dragged down by the current tense relationship between Russia and Ukraine, and the Swiss Franc was able to maintain a slight rise. The dollar continues to see long and short, while gold is relatively strong and is still making short-term direction choices.
Fed officials are in a period of silence, but the Wall Street Journal, the "mouthpiece" of the Fed, said that the Fed is expected to accelerate the taper process at the FOMC meeting next week and end bond purchase in March next year, opening the door for raising interest rates to deal with inflation next spring. However, after the Omicron virus entered the market, the market continued to ignore the prospect of the Fed's tightening policy.
In the interest rate resolution, the Reserve Bank of Australia maintained the benchmark interest rate at an all-time low of 0.1% and kept the bond purchase level unchanged. At the same time, it hinted that the bond purchase would end in February, which laid the foundation for raising interest rates in July. Overall, the RBA is optimistic about the economic outlook and is not worried about upward inflation. The tone of the meeting statement is relatively neutral and did not accelerate the reduction of QE beyond expectations. However, as the current focus of the market is not on monetary policy, which weakens the impact of the Reserve Bank of Australia's interest rate decision on the Australian dollar, the Australian dollar mainly follows the market sentiment. The interest rate resolution of the Central Bank of Canada will also be announced within the day. The Central Bank of Canada has ended QE and focused on how to communicate with the market about the prospect of raising interest rates. There is no unexpected decision. The Canadian dollar is still expected to be driven by market sentiment and oil prices. In addition, pay attention to the short-term upward trend line of the US dollar index. This week, the US dollar saw a long and short, but it remained on the trend line as a whole, with the focus on further upward, and pay attention to the performance of the technical level. The direction of the US dollar is a major constraint on Africa and the United States.
