Asian Stocks Rally as Cooling U.S. Inflation Boosts Fed Rate Cut Hopes 
US Stock Futures Fall as Netflix Outlook, Chip Selloff and Iran Tensions Weigh on Markets 
FxWirePro: Daily Commodity Tracker - 21st March, 2022 
Dollar Slides as Softer US Inflation Dims Fed Rate Hike Expectations 
Oil Prices Climb as Trump Escalates Iran Pressure, Strait of Hormuz Risks Grow 
U.S. Imposes 25% Tariff on Select Brazilian Imports After Section 301 Trade Investigation 
Gold Prices Slip as Oil Rally Fuels Inflation Fears, Strengthens Dollar 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Port of Los Angeles Posts Record June Cargo Volume as Importers Rush Ahead of U.S. Tariffs 
China Home Prices Fall Again in June Despite Slower Pace of Decline 
South Korea’s KOSPI Enters Bear Market Despite Remaining 2026’s Best-Performing Major Stock Index 
Asian Stocks Slide as Chip Selloff Deepens Ahead of TSMC Earnings 
The Australian dollar is expected to end this year at 74 US cents and end 2019 at 76 US cents, according to the latest research report from St. George Economics. A multitude of factors have placed downward pressure on the Australian dollar in recent months. These include a lift in downside risks to global growth, particularly with rising global trade tensions. In addition, there has been an overall escalation of risk aversion in financial markets.
A great deal of uncertainty is seen surrounding the outlook for the Australian dollar. Key fundamentals, commodity prices and interest rates, are not providing a clear gauge on the direction of the AUD. Moreover, the inclination for US President Trump to backflip on policies suggests that there is significant uncertainty to the global economy and, therefore, the Australian dollar outlook.
There has been a clear shift in the way financial markets are reacting to information since the turn of the year. Over 2018, the relationship between commodity prices and the Australian dollar has broken down somewhat.
A likely explanation for this breakdown is a shakeup in financial market sentiment, increased attention on inflation and concern over rising interest rates. In a risk-averse environment, the Australian dollar tends to come under downward pressure.
Additionally, the widening interest-rate differential between Australia and the US, which has posed a downside risk for some years, might be now having more of an impact in pressuring the Australian dollar lower. The US economy is also once again a standout in the world and performing relatively strongly in comparison to other economies. This comparative strength has assisted in propping up the US dollar against other major currencies.
"Given that uncertainty surrounding global trade negotiations is likely to persist for some time and given that we do not expect the risk aversion in financial markets to subside substantially over the near term, we have downgraded our Australian dollar forecasts," the report added.
