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AUDUSD Falls To Fresh 5-Month Low, USDMXN Rises Above 17.00

FOREX
  • The greenback operates in positive territory once more, firmer against most others in G10, with the USD Index hovering just below cycle highs at 106.44, printed earlier in the session.
  • With major equities consolidating at the most recent lows amid geopolitical tensions, risk sensitive currencies have suffered on Tuesday with AUD underperforming in G10 and the Mexican peso a notable laggard in emerging markets.
  • Key AUDUSD support at 0.6443, the Feb 13 low, has been cleared and this confirms a resumption of the downtrend that started late December last year. Scope is seen for an extension towards 0.6339, the Nov 10 ‘23 low. Firm resistance is now seen at 0.6552, the 50-day EMA.
  • For USDMXN, the unfavourable backdrop for EM FX and positioning dynamics are exacerbating the move higher in today’s session. The pair has risen back above 17.00 and is up 1.75% as we approach the APAC crossover.
  • GBPUSD was a subject of focus following mixed jobs market data. There's been no let-up for GBP vols following this morning's data, however, with overnights now capturing the Wednesday CPI release. Overnight implied has cleared 13 points, to double the YTD average background vol of 6.5 points. This blows out the break-even on an overnight GBP/USD straddle to ~65 pips, thereby capturing the cycle low and key support at 1.2409.
  • Elsewhere, a further moderation in the Bank of Canada's preferred core metrics helped USDCAD rise to levels just shy of 1.3850, not seen since November.
  • There was also brief but sharp volatility for USDJPY when after rising to a new cycle high of 154.77, saw rapid selling take the pair to 154.04 session lows before quickly stabilising. Worth recalling we have had sharp intraday corrections in USD/JPY in recent months, that turned out *not* to be official intervention.
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