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A$ Underperforms As Iron Ore Prices Continue Falling, Jobs Data Coming Up

AUD

Aussie trended lower through the European and US sessions to underperform the G10 except Kiwi. AUDUSD is down 0.6% to 0.6596 returning to below 66c after a high of 0.6643 driven by weaker commodity prices, especially iron ore, from China worries. It couldn’t find support from stronger equities and lower-than-expected US headline CPI. The pair is currently around 0.6598. The USD index fell only 0.1%.

  • AUDUSD’s bearish theme remains but a short-term corrective cycle is in play. The pair is back below the 50-day EMA of 0.6614. A clear break of this is needed to undermine the bearish theme. Initial support is at 0.6508 and the bear trigger at 0.6350, while initial resistance is at 0.6643.
  • Kiwi underperformed the G10 following the RBNZ’s rate cut on Wednesday and dovish outlook. AUDNZD rose to a high of 1.1041 following the decision but is currently just under the 1.10 mark up 0.7% to 1.0991.
  • AUDJPY fell 0.3% to 97.10 after a high of 97.87 early in European trading. AUDEUR trended lower through the day to be down 0.7% to 0.5990. AUDGBP is 0.3% lower at 0.5142.
  • Equities were stronger with the S&P up 0.4% and Euro stoxx +0.7%. Oil prices were lower with Brent down 0.8% to $80.03/bbl. Copper fell 0.2% and iron ore is down to $95-96/t.
  • Today July labour market data print and Bloomberg consensus expects a 20k rise in new jobs and for the unemployment rate to be stable at 4.1%. There are also Melbourne Institute August inflation expectations.

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