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A$ Best G10 Performer Amid Hawkish RBA/US Equity Rebound

AUD
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AUD/USD sits just under 0.6600 in early Friday dealings, close to late Thursday highs from US trade. The A$ rallied 1.14% for Thursday's session, comfortably the top G10 FX performer. Broader G10 FX trends were mixed, with safe havens CHF and JPY the weakest performers. A surge in US equities provided a risk on tone to benefit the AUD

  • Levels wise for AUD/USD, we are just above the 20-day EMA (0.6583), while the 200-day is close to 0.6600. The July 22 high was 0.6702 in terms of a further upside target. On the downside, the Aug 6 low rests at 0.6472.
  • A$ strength carried over from yesterday's hawkish RBA rhetoric, as RBA Governor firmly reiterated the central bank considered raising rates this week. AU-US 3 month rate differentials (1yr ahead) sit off highs, last +41bps, but still point to a supportive AUD backdrop.
  • US yields were firmer through Thursday US trade, reacting to a slight downtick in the initial jobless claims. Fed easing expectations were also pared.
  • Equity sentiment was very positive for US markets, as recession fears ebbed somewhat, which lent a positive risk on tone to FX markets, benefiting the AUD. AUD/JPY tracks back above 97.00 in early Friday dealings, up nearly 8% from intra-session lows on Monday.
  • Commodity indices were higher, for the Bloomberg aggregate index and sub-index for metals (+0.42%).
  • The local data calendar is empty today. The RBA Deputy Governor speaks on Monday.
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AUD/USD sits just under 0.6600 in early Friday dealings, close to late Thursday highs from US trade. The A$ rallied 1.14% for Thursday's session, comfortably the top G10 FX performer. Broader G10 FX trends were mixed, with safe havens CHF and JPY the weakest performers. A surge in US equities provided a risk on tone to benefit the AUD

  • Levels wise for AUD/USD, we are just above the 20-day EMA (0.6583), while the 200-day is close to 0.6600. The July 22 high was 0.6702 in terms of a further upside target. On the downside, the Aug 6 low rests at 0.6472.
  • A$ strength carried over from yesterday's hawkish RBA rhetoric, as RBA Governor firmly reiterated the central bank considered raising rates this week. AU-US 3 month rate differentials (1yr ahead) sit off highs, last +41bps, but still point to a supportive AUD backdrop.
  • US yields were firmer through Thursday US trade, reacting to a slight downtick in the initial jobless claims. Fed easing expectations were also pared.
  • Equity sentiment was very positive for US markets, as recession fears ebbed somewhat, which lent a positive risk on tone to FX markets, benefiting the AUD. AUD/JPY tracks back above 97.00 in early Friday dealings, up nearly 8% from intra-session lows on Monday.
  • Commodity indices were higher, for the Bloomberg aggregate index and sub-index for metals (+0.42%).
  • The local data calendar is empty today. The RBA Deputy Governor speaks on Monday.