AUD Underperforms G10, Central Bank Stances Weigh On AUDNZD

Overnight AUDUSD reversed the gains it made during the day and has settled back below 0.64. AUD was the worst G10 performer against the USD falling 0.1%, as the RBA hiked rates 25bp as expected.

• The USD strengthened overnight on better-than-expected JOLTS job opening data and PMIs. The DXY had been trending lower but rose 0.8% after the data.
• Technicals continue to point to a bullish AUDUSD. Focus is on the initial resistance level and October 4 high of 0.6547. A break through this would strengthen current bullish conditions.
• Yesterday the AUD underperformed NZD and fell to a low of 1.0926, just above the May 25 low. It is now at 1.0946. AUDJPY also fell from an intraday high of 95.56 to 94.34 and is now trading around 94.80.
• European equity markets were stronger overnight but the S&P500 fell 0.4% after the stronger data reduced hopes of the Fed pivoting. After spiking in reaction to the data, the VIX fell again to be flat on the day at 25.8%. Oil prices rose about 2% after the US API data reported a 6.5mn bbl drawdown in crude inventories. Copper prices were 2.7% higher and iron ore is also up at $80.
• The focus today will be the Fed meeting later where they are expected to hike rates a further 75bp. In Australia, there is home loan and building approval data for September and both series are expected to contract.