AUD Underperforms As RBA Expected To Maintain Gradual Approach

AUDUSD dropped to 0.6743 after the better-than-expected US payroll data. It recovered some of the losses and is now trading around 0.6780. However, AUD was the second worst performer in the G10 after NOK. The USD gave back its payroll gains to finish the session down 0.2%

• Trend conditions remain bullish for AUDUSD but a clear break of firm support of 0.6613, the 50-day EMA, would be seen as bearish.
• AUDNZD finished Friday at 1.0618, the lowest since mid-January. It is currently trading just above this point around 1.0630. With the RBA expected to hike 25bp this week compared to the RBNZ’s 75bp November move, pressure on the cross is likely to remain. AUDJPY is down on the NY close and is around 91.20. AUD is also weaker against the EUR and GBP and down to 0.6430 and 0.5525 respectively.
• Equity markets were mixed Friday night but generally down. The S&P 500 fell 0.1% and the Eurostoxx -0.2%. The LME metals index was up 6.8% on the week, on demand optimism. Oil prices fell over a percent on Friday but ended the week higher. Iron ore is at its highest since mid-August around $107.50, also on better demand prospects.
• Today the Melbourne Institute measure of inflation prints for November. There is also Q3 profits and inventories, which feed into GDP. The highlight of the week is Tuesday’s RBA meeting. There are European and US PMIs overnight.