AUDUSD Holds Above 66c As Equities Rally, AUDNZD Continues Trending Lower

Risk-sensitive currencies performed well on Tuesday in an environment of rallying equity markets. AUDUSD was able to sustain its move above 66c following US PPI printing below expectations, especially core, making a September Fed cut look more likely and driving the US dollar lower (BBDXY -0.4%). July US CPI is out later today. AUDUSD rose 0.7% to 0.6634, close to the intraday high of 0.6638, and it is currently around 0.6633.

• A corrective cycle continues and AUDUSD broke above the 50-day EMA and pivot resistance at 0.6613, which undermines the bearish theme. The next level to watch is 0.6646, July 23 high. Initial support is at 0.6472.
• AUDNZD approached 1.09 reaching a low of 1.0903. The pair fell 0.2% to 1.0920 ahead of today’s RBNZ decision. The market and forecasters are split between a 25bp cut and another pause.
• Yen underperformed the G10 and so AUDJPY is up 0.5% to 97.40 but off the intraday high of 97.75. AUDEUR rose 0.1% to 0.6033 but AUDGBP is down 0.1% to 0.5156 after stronger UK wages data.
• Equities rallied with the S&P up 1.7% and Euro stoxx +0.5%. Oil sold off after Monday’s rally with WTI down 1.8% to $78.67/bbl. Copper fell 0.2% and iron ore is around $98/t.
• There are no data or events in Australia today.