A$ Rally Continued On Better China PMIs, Downtrend Remains Intact

Aussie was up 0.4% against the dollar on Wednesday staying above 0.6740 for most of the session. It is currently trading around 0.6758. It was aided by the improved data from China and was one of the better G10 performers but underperformed the euro and kiwi on the back of softer local data. The USD index was down 0.4%.

• AUDUSD remains in a downtrend and short-term gains are seen as corrective. The next key support is 0.6629, the December 20 low, and initial support is at 0.6695.
• Aussie is down 0.7% against the kiwi to around 1.0803 and down 0.4% versus the euro to 0.6335. AUDJPY is up 0.4% to 92.00 and AUDGBP +0.4% to 0.5622.
• Equity markets were generally weaker with the S&P and Eurostoxx both down 0.5% but the Dow Jones flat and the FTSE up 0.5%. VIX was steady at 20.7%. Commodities were stronger following the robust China PMIs. Brent oil prices are up 1.1% to $84.40/bbl. Copper prices rose 2% and iron ore is trading just around $127/t.
• Today January building approvals print. They are expected to fall 7% m/m after apartments pushed up December. Private houses should fall another 2.1%.