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A$ Struggling Against Other Commodity FX

AUD

AUD/USD has moved up from earlier lows to be back close too unchanged on the day at 0.7100. AUD/JPY shifts are a key driver at the moment, although as we note below A$ underperformance against other commodity FX has been a theme post the RBA this week.

  • AUD/USD's bounce from 0.7085, coincided with AUD/JPY rebounding off the 95.00 level. We are now back to 95.20 on this cross. The USD/JPY dip below 134.00 was supported.
  • US equity futures are close to flat and while the mood for Asia Pac remains weak, China/HK markets are off early lows.
  • AUD/NZD is not far from its recent lows though. The pair is trying to break back sub 1.1100. Back end yield spreads continue to move against AUD relative to NZD, but we have seen stability at the 2yr tenor, see the chart below. The AUD/NZD cross is now down 0.55% from its post RBA peak (around 1.1160).

Fig 1: AUD/NZD & Relative Yield Spreads

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AUD/USD has moved up from earlier lows to be back close too unchanged on the day at 0.7100. AUD/JPY shifts are a key driver at the moment, although as we note below A$ underperformance against other commodity FX has been a theme post the RBA this week.

  • AUD/USD's bounce from 0.7085, coincided with AUD/JPY rebounding off the 95.00 level. We are now back to 95.20 on this cross. The USD/JPY dip below 134.00 was supported.
  • US equity futures are close to flat and while the mood for Asia Pac remains weak, China/HK markets are off early lows.
  • AUD/NZD is not far from its recent lows though. The pair is trying to break back sub 1.1100. Back end yield spreads continue to move against AUD relative to NZD, but we have seen stability at the 2yr tenor, see the chart below. The AUD/NZD cross is now down 0.55% from its post RBA peak (around 1.1160).

Fig 1: AUD/NZD & Relative Yield Spreads

Keep reading...Show less