Re-widening of the interest rate differential will see the Australian dollar higher. Rumors of the Medley report that the Fed will stop tightening at 4.75 percent or 5 percent is below market expectations.
More Quotes from John Rothfield:
The Australian dollar may struggle, simply because we perceive a further narrowing of interest-rate differentials.John Rothfield
This hasn't changed our view that the New Zealand dollar is in a serial decline. The currency is on a depreciation cycle, regardless of whether interest rates go down or not.
John Rothfield
The impact of day-to-day changes in the yield spread remain significant for the Australian dollar. Some people are building in the case for a rate cut in Australia by year-end so that's clearly an issue for the Australian dollar.
John Rothfield
The numbers are quite neutral, so they don't encourage investors to buy the Canadian dollar. The market is also looking a little bit hesitant on what the Bank of Canada governor will say later today.
John Rothfield
Major central banks in the world have talked about hiking rates, so if the Bank of Canada signals they are coming to the end of rate increases, it may push investors to sell the Canadian dollar further.
John Rothfield
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