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FOREX: AUD & NZD Weakness Continues, Fresh Cycle Lows

FOREX
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AUD and NZD weakness has again been a feature of G10 FX trade today. Both pairs have made fresh cycle lows. The BBDXY index is little changed and is holding above 1289 at this stage. 

  • AUD/USD has fallen to 0.6310/15, fresh lows back to oct last year. We are off around 0.30% versus end Tuesday levels in NY. We had the Mid-Year Economic and Fiscal Outlook, the FY26 deficit has been revised up 0.1pp to 1.6% of GDP, FY27 0.4pp to 1.3% and FY28 0.2pp to 1.0%. This, along with soft growth expectations is a likely AUD negative.
  • The metals backdrop is softer, with iron ore and copper weaker, continuing the recent softness in this space.
  • Regional equity sentiment is mixed, China/HK markets are higher but this isn't helping the higher beta plays. For AUD/USD next support will be eyed at 0.6300.
  • NZD/USD is back to 0.5740, off by the same amount as AUD. NZD/USD appears stuck in a falling wedge within a broader bearish trend, showing mixed signals with Monday’s morning star pattern followed by Tuesday’s bearish reversal. There isn't much support for the pair until 0.5600.
  • USD/JPY has drifted lower this afternoon, last back around 153.40/45, little changed for the session. We are still above intra-session lows from Tuesday (153.16). EUR/USD has edged up slightly, last back above 1.0500.
  • US yields have ticked down, losses a little beyond 1bps at this stage, which may helping EUR and JPY. US equity futures opened lower but are now modestly higher.
  • Looking ahead, the Fed decision is announced and a 25bp rate cut is widely expected. There are also US November housing starts/building permits and Q3 current account data, as well as UK November CPI/PPI. The ECB’s Lane speaks.
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AUD and NZD weakness has again been a feature of G10 FX trade today. Both pairs have made fresh cycle lows. The BBDXY index is little changed and is holding above 1289 at this stage. 

  • AUD/USD has fallen to 0.6310/15, fresh lows back to oct last year. We are off around 0.30% versus end Tuesday levels in NY. We had the Mid-Year Economic and Fiscal Outlook, the FY26 deficit has been revised up 0.1pp to 1.6% of GDP, FY27 0.4pp to 1.3% and FY28 0.2pp to 1.0%. This, along with soft growth expectations is a likely AUD negative.
  • The metals backdrop is softer, with iron ore and copper weaker, continuing the recent softness in this space.
  • Regional equity sentiment is mixed, China/HK markets are higher but this isn't helping the higher beta plays. For AUD/USD next support will be eyed at 0.6300.
  • NZD/USD is back to 0.5740, off by the same amount as AUD. NZD/USD appears stuck in a falling wedge within a broader bearish trend, showing mixed signals with Monday’s morning star pattern followed by Tuesday’s bearish reversal. There isn't much support for the pair until 0.5600.
  • USD/JPY has drifted lower this afternoon, last back around 153.40/45, little changed for the session. We are still above intra-session lows from Tuesday (153.16). EUR/USD has edged up slightly, last back above 1.0500.
  • US yields have ticked down, losses a little beyond 1bps at this stage, which may helping EUR and JPY. US equity futures opened lower but are now modestly higher.
  • Looking ahead, the Fed decision is announced and a 25bp rate cut is widely expected. There are also US November housing starts/building permits and Q3 current account data, as well as UK November CPI/PPI. The ECB’s Lane speaks.