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AUD: AUDUSD Down To 2-Year Low Following More Hawkish Fed

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Aussie again underperformed the G10 in the wake of the Fed lifting its rate outlook, while still easing 25bp as expected. Risk appetite deteriorated sharply following news of a more “cautious” approach to Fed easing and that one FOMC member dissented voting for no change in rates. The AUDUSD is down 1.8% to 0.6225 as a result, close to the intraday trough and the lowest since mid-October 2022. The USD jumped on the more hawkish tone with BBDXY up 0.9%.

  • AUDUSD closed at 0.6512 at the end of November and it is now almost 3c lower and down 4.4% since then.
  • Fed Chair Powell said in the press conference that given recent easing, “our policy stance is now significantly less restrictive” and so the FOMC can “be more cautious as we consider further adjustments” to rates.
  • AUDUSD has fallen below not only round number support at 0.6300 but also support levels at 0.6270 and 0.6259. It is holding above 0.6210, 21 October 2022. The dominant downtrend has been reinforced by these moves.
  • The yen outperformed in the risk-off environment leaving AUDJPY down 1% to 96.30. AUDNZD is 0.1% lower at 1.1003. AUDEUR is -0.6% to 0.6005 and AUDGBP -0.8% to 0.4948.
  • US equities have plummeted with the S&P down 3%. The Euro stoxx rose 0.3% before-hand. Oil is off its highs with WTI unchanged at $70.08/bbl. Copper is down 1.3% and iron ore lower at around $102/t.
  • Today Melbourne Institute inflation expectations for December print. It fell below 4% in November. 
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Aussie again underperformed the G10 in the wake of the Fed lifting its rate outlook, while still easing 25bp as expected. Risk appetite deteriorated sharply following news of a more “cautious” approach to Fed easing and that one FOMC member dissented voting for no change in rates. The AUDUSD is down 1.8% to 0.6225 as a result, close to the intraday trough and the lowest since mid-October 2022. The USD jumped on the more hawkish tone with BBDXY up 0.9%.

  • AUDUSD closed at 0.6512 at the end of November and it is now almost 3c lower and down 4.4% since then.
  • Fed Chair Powell said in the press conference that given recent easing, “our policy stance is now significantly less restrictive” and so the FOMC can “be more cautious as we consider further adjustments” to rates.
  • AUDUSD has fallen below not only round number support at 0.6300 but also support levels at 0.6270 and 0.6259. It is holding above 0.6210, 21 October 2022. The dominant downtrend has been reinforced by these moves.
  • The yen outperformed in the risk-off environment leaving AUDJPY down 1% to 96.30. AUDNZD is 0.1% lower at 1.1003. AUDEUR is -0.6% to 0.6005 and AUDGBP -0.8% to 0.4948.
  • US equities have plummeted with the S&P down 3%. The Euro stoxx rose 0.3% before-hand. Oil is off its highs with WTI unchanged at $70.08/bbl. Copper is down 1.3% and iron ore lower at around $102/t.
  • Today Melbourne Institute inflation expectations for December print. It fell below 4% in November.