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FOREX: A$ Sinks On Weaker GDP, KRW Up As South Korea Looks To Contain Fallout

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The USD BBDXY index is little changed in the first part of Wednesday dealings. The index was last near 1281.25, but the main story has been AUD weakness post weaker than forecast Q3 GDP numbers. 

  • AUD/USD got too fresh multi month lows of 0.6408. The pair sits slightly higher now, last near 0.6435, still off 0.80% for the session. We have seen a sharp move lower in local yields, while RBA pricing for cuts next year has firmed as well. A cut for the April meeting is now 95% priced. Downside focus for AUD/USD is likely to rest on a target south of 0.6400.
  • Q3 GDP for Australia showed flat consumer spending and little private sector growth elsewhere. Government spending boosted the headline of 0.3% growth, but this was still below market expectations.
  • NZD/USD got dragged lower as well, the pair last near 0.5855, off around 0.45%.
  • USD/JPY got to lows of 149.53, but sits back in the 149.90/95 in latest dealings. The leader of the DPP, Yucihiro Tamaki, will temporarily step down over a scandal related to an affair (per BBG). DPP is a key power broker for the minor led Ishiba government. It remains to be seen if this impacts legislation that needs to be passed by the Ishiba regime.
  • Spot USD/KRW is much lower, as the authorities try to contain fallout from the Tuesday martial law episode. It remains to be seen if President Yoon stays on, with the opposition calling for him to be impeached. The pair was last near 1412, up 1.20% for the session in won terms.
  • In the cross asset space, US yields have ticked down this afternoon, led by the front end, while US equity futures are higher.
  • Looking ahead, we have final PMI reads in the EU and UK. BoE speak, along with ECB speak. In the US the ADP prints, along with the services ISM. There is also Fed speak, headlined by comments from Fed Chair Powell. 
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The USD BBDXY index is little changed in the first part of Wednesday dealings. The index was last near 1281.25, but the main story has been AUD weakness post weaker than forecast Q3 GDP numbers. 

  • AUD/USD got too fresh multi month lows of 0.6408. The pair sits slightly higher now, last near 0.6435, still off 0.80% for the session. We have seen a sharp move lower in local yields, while RBA pricing for cuts next year has firmed as well. A cut for the April meeting is now 95% priced. Downside focus for AUD/USD is likely to rest on a target south of 0.6400.
  • Q3 GDP for Australia showed flat consumer spending and little private sector growth elsewhere. Government spending boosted the headline of 0.3% growth, but this was still below market expectations.
  • NZD/USD got dragged lower as well, the pair last near 0.5855, off around 0.45%.
  • USD/JPY got to lows of 149.53, but sits back in the 149.90/95 in latest dealings. The leader of the DPP, Yucihiro Tamaki, will temporarily step down over a scandal related to an affair (per BBG). DPP is a key power broker for the minor led Ishiba government. It remains to be seen if this impacts legislation that needs to be passed by the Ishiba regime.
  • Spot USD/KRW is much lower, as the authorities try to contain fallout from the Tuesday martial law episode. It remains to be seen if President Yoon stays on, with the opposition calling for him to be impeached. The pair was last near 1412, up 1.20% for the session in won terms.
  • In the cross asset space, US yields have ticked down this afternoon, led by the front end, while US equity futures are higher.
  • Looking ahead, we have final PMI reads in the EU and UK. BoE speak, along with ECB speak. In the US the ADP prints, along with the services ISM. There is also Fed speak, headlined by comments from Fed Chair Powell.