AUDUSD Climbs On Equity Market Strength, Holding Despite Geopolitics

AUDUSD rallied to just under 0.6800, its highest since mid-September, as risk appetite improved on the back of Fed speak indicating a pivot and lower-than-expected US PPI data. It is now trading around 0.6760.

• AUDUSD sustained a break through Monday’s intraday high of 0.6724 but the 61.8% retracement of the Aug 11 – Oct 13 downleg at 0.6768 seems to be providing some resistance. After a clear break of this level, 0.6800 is the next one to watch. AUDUSD continues to climb reinforcing current bullish conditions.
• The major AUD crosses range traded but AUD gained against the euro rising from an intraday low of 0.6459 to 0.6552 and is now trading around 0.6530.
• Equity markets were up across the board, apart from the FTSE, on the better risk environment. The S&P 500 rose 0.9% and the Eurostoxx +0.7%. Oil prices were higher with WTI +1% to $86.75/bbl after reports of a Russian missile landing in Poland. Copper prices were down slightly. Iron ore continues to trade around $92-$93/tonne.
• Today the Wage Price Index for Q3 is published which will be watched closely to see if it is still consistent with the RBA’s inflation target. It is expected to be higher than Q2’s reading at 0.9% q/q and 3.0% y/y. Westpac’s Leading Index for October is also out. Later UK October CPI and US retail sales print.