AUD Rallies On Improved Risk Appetite, Watch RBA Comments Today

The AUDUSD rallied overnight to a high of 0.6312 as risk appetite improved. While the G10 ex JPY all rose versus the USD, the AUD was the second best performer after GBP. AUDUSD is now trading just below 0.6290.

• AUDUSD is trading in a channel between its initial support of 0.6170 and resistance of 0.6363. But it is closer to its recent lows and the bearish theme remains. The AUD gained against the NZD and reached around 1.1180 but has come back to 1.1160/70 ahead of Q3 NZ CPI which is unlikely to show any improvement in underlying inflation. AUDJPY got above 93.766.
• The DXY fell 1.1% overnight on better risk sentiment after the NY State Empire Manufacturing came in a lot weaker than expected. Equities rallied with the S&P500 +2.7%, Eurostoxx +1.8% and FTSE +0.9%. The VIX fell to 30.7% but ended the day higher at 31.4%.
• Despite the better risk environment, commodities didn’t benefit due to continued global demand concerns. Oil prices were stable with WTI down 0.07% and Brent up 0.17%. Copper prices fell 0.4%. Iron ore remains close to recent lows, just above $92/tonne, as China reiterated its commitment to a Zero-Covid policy.
• RBA Deputy Governor Bullock speaks today at 11.05AEDT. This will be followed by the minutesfrom the October 4 RBA meeting.