A$ Outperforms As RBA Doesn’t Rule Out Further Rate Hikes

Aussie was one of the outperformers on Tuesday as the greenback fell on lower US Treasury yields and the RBA said that a further rate hike couldn’t be “ruled out”. AUDUSD trended higher through the NY session and is now up 0.6% to 0.6523, close to the intraday high. The USD index fell 0.3%.

• AUDUSD spent a lot of yesterday trading below 65c but now seems clearly above. The bearish theme remains intact as the pair fell to new cycle lows on Monday which signals scope to fall to 0.6453, November 17 low. Moving average studies are crossing into a bear mode set up. Initial support is at 0.6459 and resistance at 0.6625.
• Aussie rose sharply versus the kiwi following the RBA decision and then traded sideways thereafter. AUDNZD is up 0.2% to 1.0731 after a high of 1.0738. AUDJPY is moderately higher at 96.46. AUDEUR rose 0.5% to 0.6065 and AUDGBP +0.1% to 0.5178.
• Equity markets rallied with Euro stoxx up 0.8% and S&P +0.2%. Oil prices were stronger with Brent up 0.9% to $78.68/bbl. Copper rose 0.3% and iron ore is around $125/t.
• There are no data or events in Australia today.