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AUD/USD Price Forecast: Australian Dollar Rallies on Fed Repricing

March 13, 2023

Via: DailyFX

The Australian dollar garnered support this Monday morning after continued concern over the Silicon Valley Bank (SIVB) collapse despite US policy makers (Federal Reserve, US Treasury and the Federal Deposit Insurance Corporation) issuing statements in attempts to quell worries in and around the US banking system. The result was a dovish repricing of Fed interest rates with the 2023 terminal rate for thus cycle now marginally above the 5% mark (see table below) from over 5.6% just last week. Money markets have drastically reduced the potential for a 50bps towards a 25bps increment and possibly none at all – leaving the U.S. dollar on the backfoot!

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