AUDUSD Below Key Support

Aussie continues to sink following further China policy support with the equity and commodity sell off also weighing. AUDUSD is down 0.5% to 0.6552, close to the intraday trough and the lowest since early May. It has broken below key support at 0.6576 and the next support level too, signalling a downtrend. The pair is down 3.4% since July 12. The USD is slightly lower.

• Today’s China stimulus included a 20bp MLF cut and a 2000bn liquidity injection, which follows Monday’s 10bp reduction in key rates.
• Aussie is also sharply weaker against the major crosses. AUDJPY is down another 1.3% at 99.94 to fall below 100 for the first time since early May. Even AUDNZD is softer falling 0.3% to 1.1064. AUDEUR is down 0.4% to 0.6044 and AUDGBP -0.3% to 0.5082, the lowest since September 2023.
• Equities continue to sell off given the deterioration in risk appetite with the ASX down 1.2%, China’s CSI 300 -0.5% and Hang Seng -1.5%. The S&P e-mini is 0.1% higher. Oil prices are lower with WTI -0.9% to $76.92/bbl. Copper is down another 1.3% and iron ore is just under $100/t.
• Later US Q2 GDP, jobless claims, June durable orders and German July Ifo survey print. Also ECB President Lagarde speaks.