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AUD/USD has sunk to fresh lows to meet daily 0.7260s, sliding from a 0.7305 high hit by storm this week when the stronger US dollar coupled with a dovish RBA as hawkish expectations as well as pressures on the US Fed agitated.
UK and US equities were softer as well. AUD, as a higher beta currency, suffered, Wednesday, as a consequence due to the inflation concerns that are inflaming the financial markets.
UK inflation came in stronger than expected while supply constraints weighed on housing starts in the US. The US dollar drifted lower from a new 16-month high that was printed on Tuesday.
Money markets are now pricing in a high probability of a Fed rate increase in June, followed by another in November. CME Derivatives’ data suggest a 50% probability of a 25 bps rate hike by July 2022.
