A$ Underperforms As Iron Ore Falls Further

Aussie couldn’t hold onto Thursday’s gains and underperformed the G10 on Friday with the AUDUSD down 0.8%. It is currently trading around 0.6690. It breached 67c a couple of times during the NY session but held below most of the time. The USD index fell 0.1% after the post-PMI spike was unwound.

• The AUD particularly underperformed Europe with AUDEUR down 1% to 0.6086 and AUDGBP -0.8% to 0.5376. AUDJPY fell 0.9% to 89.68. Aussie is down 0.1% versus kiwi at 1.0905.
• Support to watch for AUDUSD is 0.6620, the April 10 low and a break of this would be a bearish development and open up the bear trigger of 0.6565, the March 10 low. On the upside, a break of 0.6806, short-term resistance, would open 0.6861 and reinstate a bullish theme.
• Equity markets were stronger with the S&P up 0.1% and the Eurostoxx +0.5%. The VIX fell slightly to 16.75%. Oil prices were higher with the WTI up 0.7% to $77.73/bbl. After rising the previous week, the LME metals index fell 1.1% on Friday to be down 1.3% over the week. Iron ore took another step down and is now around $106/t.
• There is no data or events scheduled in Australia today ahead of tomorrow’s ANZAC day holiday. The focus of the week is likely to be Wednesday’s Q1 CPI data, which will be a very important input for the May 2 RBA rate decision.