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FOREX: AUD Firms, JPY Slips on China Policy Tweak

FOREX
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  • The greenback is slightly softer, with the JPY similarly backtracking after risk sentiment saw support on the back of China headlines alongside the European open. China's Politburo meeting ended with a firmer commitment to easing and propping up the economy next year, with the central bank also making a  major dovish shift to monetary policy for the first time since 2011.
  • As such, equity markets are firmer in Europe, however US futures are yet to receive the full benefits, pointing to a modestly lower open on Wall Street later today. AUD and NZD are the session's best performers in the interim.
  • News from China this morning has provided a boost to risk sentiment across FX543wf markets, with AUD (+0.88) leading the G10 charge. We noted the monetary policy stance tweak and fiscal language used today reduces the odds of a meaningful move lower in the country's GDP growth target for '25. Despite AUDUSD’s advance, trend conditions remain bearish and resistance is at 0.6497, the 20-day EMA. This average has capped gains well in recent weeks.
  • Focus for the remainder of Monday trade turns to the NY Fed's 1-year inflation expectations print as well as an appearance from BoE's Ramsden. The Fed have entered the their pre-meeting media blackout - leaving the speaker schedule more quiet than usual.
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  • The greenback is slightly softer, with the JPY similarly backtracking after risk sentiment saw support on the back of China headlines alongside the European open. China's Politburo meeting ended with a firmer commitment to easing and propping up the economy next year, with the central bank also making a  major dovish shift to monetary policy for the first time since 2011.
  • As such, equity markets are firmer in Europe, however US futures are yet to receive the full benefits, pointing to a modestly lower open on Wall Street later today. AUD and NZD are the session's best performers in the interim.
  • News from China this morning has provided a boost to risk sentiment across FX543wf markets, with AUD (+0.88) leading the G10 charge. We noted the monetary policy stance tweak and fiscal language used today reduces the odds of a meaningful move lower in the country's GDP growth target for '25. Despite AUDUSD’s advance, trend conditions remain bearish and resistance is at 0.6497, the 20-day EMA. This average has capped gains well in recent weeks.
  • Focus for the remainder of Monday trade turns to the NY Fed's 1-year inflation expectations print as well as an appearance from BoE's Ramsden. The Fed have entered the their pre-meeting media blackout - leaving the speaker schedule more quiet than usual.