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AUD Corrective Bounce Fades, Focus Returns Lower

AUD
  • AUD/USD remains toward the bottom-end of the day's range, but has found some support ahead of 0.6642, yesterday's low. Prices are now chewing through the corrective bounce off 0.6596, which marks a key level for any further breakout lower.
  • AUD/USD options markets are among the few seeing slightly above-average volumes for this time of day, largely due to solid demand for downside hedges: with close to $3 in puts trading for every $2 in calls so far Wednesday. Sizeable put strikes traded between 0.6685-0.6515, but downside demand has also been noted as low as 0.6050 and 0.5840 today.
  • Trades follow the slowdown in final PMIs today (composite dropped to 50.1 today) as well as heightened speculation around the potential transition for the next RBA governor: Lowe's term expires in September, with Treasurer Chalmers set to announce this month whether Lowe's term will be extended, or a new governor could take over. The Australian posits that Treasury secretary Steven Kennedy is the frontrunner, and an announcement could be made inside two weeks.

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