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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.
AUD
AUD/USD is seeing modest outperformance as the Wednesday session unfolds. We were last in the 0.6535/40 region, marginally above end Tuesday levels in NY.
- The broader USD backdrop is still supported, led by a weaker yen, although momentum has stabilized somewhat post the earlier break above 151.00.
- At the margin, some stability in HK/China equities is likely helping the A$, with these markets up from earlier lows.
- A broader positive will be the generally positive commodity price backdrop in recent weeks, although this has been led by the energy space more so than metals etc. Still, iron ore prices have rebounded post the recent break sub $100/ton (last near $107/ton in terms of the active Singapore future).
- This is likely helping offset generally weaker relative yield differentials. The chart below plots AUD/USD against the expected 3 month AU-US policy rate differential in 1yr's time. We obviosuly have the FOMC later today in the US.
- Locally, the focus will be on tomorrow's jobs report.
- Levels wise, the focus is still on the downside. The break below the 50-day EMA at 0.6571 yesterday signals scope for the pair to move lower and opened support at 0.6478, March 5 low. The bear trigger is at 0.6443, February 13 low. Clearance of 0.6668 is needed to resume the bull cycle.
Fig 1: AUD/USD Versus Expected Policy Rate Differential In 1yr's Time
Source: MNI - Market News/Bloomberg
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.
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