The Fed is set to raise interest rates sharply again this week, which could threaten a further slowdown in the global economy, with oil prices being dragged down by increased demand concerns as a result.

The GBP recovered from its intraday lows, but the upside remains limited. The latest mixed economic data pressured the currency. However, a correction in the USD limited the downside.

The positive risk tone has weakened the USD as a safe haven and benefited the risk-sensitive AUD. As inflation heats up in Australia, expectations for a 75 basis point rate hike by the RBA could rise. This week, the FOMC meeting remains in focus, and the AUD remains under pressure from the 21 and 50-day moving averages (MAs).

Gradually widening yield spreads between Europe and the US, political instability in Italy, a contraction in business activity, and a decline in the manufacturing sector leave the possibility of the Euro (EUR) still falling to parity.

The Fed may undermine the economy if it wants to control inflation. U.S. economic growth has started to slow as the Fed has repeatedly raised interest rates. The housing market is weakening, technology companies are reducing employment scale, and jobless claims are edging up. The Fed is even more powerless amid the Russian-Ukrainian war and repeated global pandemics, given the upward inflation pressure, partly from excess demand and partly from supply chain shortages that are hard for the Fed to control. If in the next 2 to 3 years, the Fed will adjust monetary policy as the main means to control inflation, then inflation will become more complicated.

Gold price rebounded after reaching the bottom in the short term, continuing to fluctuate upward. However, there is still strong pressure around 1750, which risks a fall from the high.