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AUD Downside Risk Evident in Hedging via Options

AUSSIE

AUD/USD falling to fresh session lows - despite being an early outperformer during Asia-Pac hours. AUD is falling in tandem with the commodities complex, which sees energy and precious metals all weaker. Oct22 low at 0.7085 acts as first support.


  • Options markets see the short-term outlook deteriorating also, with the one-week RR contract hitting the lowest levels since end-September (this contract now captures the Nov 3rd RBA rate decision, at which markets see a 15bps rate cut).
  • Hedging activity is higher than average for this time of day, with 0.6975 and 0.6990 put strikes helping to drive volumes, although this is somewhat countered by large interest in 0.7400 3m call strikes that traded after the CPI data and Debelle/Bullock's speeches overnight.

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