More pressure on the stock markets is expected to continue.
Australian stock markets ended the H1 2022 losing a tenth of their market value with more warns about a possible recession and rampant inflation. This is while Australian Aussie is also in line with the country's economy. We should not forget the Russia-Ukraine war as one of the main reasons for these downtrends. Reports show a $250 billion ($172.05 billion) decrease in S&P/ASX 200 index market value.
Inflation in Australia hit a 20-year high. The consumer price index in Australia surged to 5.1% in Q1 of 2022 from 3.5% in Q4, reflecting soaring fuel prices and surging building costs. Like some other major central banks, the central bank in Australia also increased a larger-than-expected 50 bps rate hike in the June meeting. With these numbers, most analysts believe that steeper rate hikes continue weighing on markets. These concerns of higher inflation can force the Reserve bank of Australia (RBA) to increase the interest rates in the next meetings.
With the current situation and data, more pressure on the stock markets is expected to be continued with more pressure on the economy. On the Forex markets, the currency will also be weaker. Therefore more downtrends in the AUDUSD chart could be likely.