A$ Outperforms On Dovish Fed, Employment Data Coming Up

Aussie outperformed a G10 that all rose against the greenback following a dovish Fed and Chair Powell stating that the FOMC is thinking about rate cuts. The subsequent equities rally also boosted AUD. AUDUSD jumped from 0.6572 to 0.6673 when projections were released showing a 50bp downward revision to rates in the next year. It is currently up 1.7% to 0.6668 The USD index sank 0.9%.

• AUDUSD approached the bull trigger at 0.6691, December 4 high, but is yet to breach it. Clearance would confirm the resumption of the uptrend and open 0.6747. In Asian trading on Wednesday the pair cleared support at 0.6557, 20-day EMA, when it fell to a low of 0.6542.
• AUDNZD is up 0.6% to 1.0756. It rose to a high of 1.0767 early in the European session following partial data showing softer Q4 inflation. AUDJPY is flat at 95.41. AUDEUR rose 0.9% to 0.6132 and AUDGBP +1.2% to 0.5286, both close to their intraday highs.
• Equity markets were mixed with the S&P rallying 1.4%, FTSE +0.1% but Euro stoxx down 0.1%. VIX was slightly higher at 12.2%. Oil prices unwound some of Tuesday’s losses with Brent up 1.9% to $74.60/bbl. Copper rose 1.3% and iron ore is $134-135/t.
• Today the November employment data print and new jobs are expected to rise 11.5k and the unemployment rate tick up 0.1pp to 3.8%. MI inflation expectations for December are also out.