UK SEP MANUFACTURING PMI 51.5 (FLASH 51.5, AUG 52.5)

MNI BRIEF: Riksbank Minutes Show Focus On Inflation Undershoot

FRANCE SEP MANUFACTURING PMI 44.6 (FLASH 44.0, AUG 43.9)

FED'S POWELL: COMMITTEE NOT IN A HURRY TO CUT RATES QUICKLY

MNI NBP WATCH: Policy Hold As Data Shows Inflation Persisting

MNI China Daily Summary: Monday, September 30

MNI: EUROZONE SEP FLASH HICP +1.8% Y/Y

EUROZONE SEP MANUFACTURING PMI 45.0 (FLASH 44.8, AUG 45.8)

SPAIN SEP MANUFACTURING PMI 53.0 (FCAST 50.2, AUG 50.5)

CANADA: Politics Week: Parliament Opens With Early Election Threats

AUSTRALIA: Albanese Lines Up Budget for May Election

AUSTRALIA: Albanese Lines Up Budget for May Election

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

EURAUD: Downside Extends, Terms of Trade Could Provide Next Leg for AUD

EURAUD
APACAustraliaCEEMEABulletGlobalForeign Exchange BulletsRegionMarkets
  • The EUR/AUD downtrend extended this morning with another lower low printed at 1.6058 - extending the losing streak to 14 of the past 17 sessions - narrowing the gap with key support and the bear trigger at the cycle low of 1.5998.
  • We wrote yesterday that spot AUD's rally in recent weeks has been driven by aggressive short-covering - the improvement in the net position off the deep net short in mid-March has been the most acute since 2014. Now the short-covering tailwind has likely concluded and China stimulus news appears largely priced in, AUD bulls will need to pick up fresh catalysts for a push through 1.60 in EUR/AUD.
  • That said, terms of trade could play a bigger part on any next leg higher for AUD - beneficial export prices have pushed terms of trade to the best levels of the year so far - and any further progress will likely stem from iron ore prices, which followed China equities with a >15% rally in recent weeks.
166 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • The EUR/AUD downtrend extended this morning with another lower low printed at 1.6058 - extending the losing streak to 14 of the past 17 sessions - narrowing the gap with key support and the bear trigger at the cycle low of 1.5998.
  • We wrote yesterday that spot AUD's rally in recent weeks has been driven by aggressive short-covering - the improvement in the net position off the deep net short in mid-March has been the most acute since 2014. Now the short-covering tailwind has likely concluded and China stimulus news appears largely priced in, AUD bulls will need to pick up fresh catalysts for a push through 1.60 in EUR/AUD.
  • That said, terms of trade could play a bigger part on any next leg higher for AUD - beneficial export prices have pushed terms of trade to the best levels of the year so far - and any further progress will likely stem from iron ore prices, which followed China equities with a >15% rally in recent weeks.