AUD Sinks as Sell-Side Bring Forward RBA Cut Calls

AUD is comfortably the poorest performer in G10 early Wednesday, falling against all others on the back of a revision to Westpac's expectations for the RBA. They now see further cuts to the cash rate, the 3-yr yield target and new drawdowns to the TFF as soon as October. In response, AUD/USD sits at new multi-month lows, with the 100-dma now becoming the primary downside target at $0.6997.

Elsewhere, PMI data has been the story of the session, with the Eurozone manufacturing sector broadly performing better than expected across September, although services have lagged. Germany continues to outperform vs. France, which unexpectedly saw the composite PMI fall below 50, and thereby indicating contraction.

Countering recent weakness however, the EUR is the strongest currency in G10 so far today, although the bounce has been shallow off the overnight two month low at $1.1672. This has prompted a slightly stall in this week's USD index recovery, although today's Fed commentary will likely play a large part on whether this trend extends.

Data is few and far between Wednesday, although the prelim US services/manufacturing PMIs may draw some focus. As was the case yesterday, more attention will be paid to the speaker schedule with no fewer than 8 Fed speakers on the docket, including Fed chair Powell appearing again in front of the House.