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A$ Surges On Equity Bounce

AUD

The A$ is the third best performing G10 currency over the past 24 hours, only shaded by NOK and NZD. AUD/USD ultimately got close to 0.7110 following the softer than expected US CPI release, before edging back down to 0.7080 into the close as US yields recovered some ground. We currently track close to this level.

  • Not surprisingly, the near-term technical picture is quite constructive for the AUD. Clearance of 0.7047, the August 1 high, is significant and opens scope for a climb toward 0.7141, a Fibonacci retracement. Also note the 100 day MA comes in 0.7088 today.
  • The A$ received notable support from surging risk appetite, with US equities firmer across the board, while the VIX index closed below 20% for the first time since early April. The market encouraged by the US CPI miss.
  • AUD/JPY hasn't seen much upside though. The pair is a little above 94.00 currently, little changed from opening levels yesterday.
  • Commodities also rallied, albeit in fairly volatile trade, particularly for oil. The aggregate Bloomberg index gained 1.64%, base metals sub-index slightly firmer at +1.73%. Iron ore nudged up to $111.50/tonne.
  • The data calendar is light, with just consumer inflation expectations for August. Note the last print came in at 6.3%.
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The A$ is the third best performing G10 currency over the past 24 hours, only shaded by NOK and NZD. AUD/USD ultimately got close to 0.7110 following the softer than expected US CPI release, before edging back down to 0.7080 into the close as US yields recovered some ground. We currently track close to this level.

  • Not surprisingly, the near-term technical picture is quite constructive for the AUD. Clearance of 0.7047, the August 1 high, is significant and opens scope for a climb toward 0.7141, a Fibonacci retracement. Also note the 100 day MA comes in 0.7088 today.
  • The A$ received notable support from surging risk appetite, with US equities firmer across the board, while the VIX index closed below 20% for the first time since early April. The market encouraged by the US CPI miss.
  • AUD/JPY hasn't seen much upside though. The pair is a little above 94.00 currently, little changed from opening levels yesterday.
  • Commodities also rallied, albeit in fairly volatile trade, particularly for oil. The aggregate Bloomberg index gained 1.64%, base metals sub-index slightly firmer at +1.73%. Iron ore nudged up to $111.50/tonne.
  • The data calendar is light, with just consumer inflation expectations for August. Note the last print came in at 6.3%.