US Dollar Defies Weak Data, Fed Tightening Bets Remain Strong
The US dollar has continued to defy expectations by maintaining its rally despite weaker-than-expected job openings and consumer confidence data. According to Fawad Razaqzada, StoneX Media Market Analyst, this resilience is a gauge of how much Federal Reserve tightening remains in play.
Rising expectations of further Fed tightening and a bond market selloff have given the greenback an additional boost, outweighing the soft economic data. This has kept the US dollar supported, with its strength also affecting other currencies such as the Australian dollar.
The Reserve Bank of Australia raised interest rates by 25 basis points, but the AUD/USD pair weakened nonetheless. Razaqzada notes that the Australian dollar's drop after the hike highlights how much of the bank's hawkish stance was already priced into the markets.