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FOREX: Dollar Bounce Falters, AUD Underpinned by China Rally

FOREX
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  • The large part of yesterday's late USD rally is holding into the NY crossover, with EUR/USD failing to make material headway above 1.1150 and GBP/USD posting only a modest bounce off the pullback low of 1.3313. That said, the USD is softer against most others in G10 on an intraday basis, with AUD and NZD performing most solidly.
  • Market moves follow a further commitment on stimulus from the Chinese authorities overnight, who made a rare commitment to growth by pledging to ramp up policities targeting both the housing market and interest rates. The headlines clearly carried weight as the Politburo intervened - helping a strong positive close for Asia-Pac equities and a +4% rally in the CSI-300 just ahead of next week's Golden Week market holidays.
  • The firm risk sentiment has underpinned AUD and NZD, keeping AUD/USD within range of yesterday's highs of 0.6908 - clearance here would resume the primary uptrend to target the best levels since March of last year.
  • Meanwhile, JPY trades softer, helping USD/JPY build on yesterday's rally and target a concrete close above 145.00 today. The level has been pierced, but bulls will be eyeing a close above here to test the 50-dma of 146.49. Today's global equity rally will be helping thew theme.
  • Slippage in oil prices on the back of positive supply stories from Libya and Saudi Arabia have somewhat dented progress in CAD and NOK, which sit alongside USD at the bottom of the G10 pile. CHF outperforming JPY as the SNB declined a super-sized 50bps cut and opted for 25bps at this morning's decision.
  • Fed speak ahead is busy - with weekly jobless claims stats and the prelim August durable good orders the data highlights. 
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  • The large part of yesterday's late USD rally is holding into the NY crossover, with EUR/USD failing to make material headway above 1.1150 and GBP/USD posting only a modest bounce off the pullback low of 1.3313. That said, the USD is softer against most others in G10 on an intraday basis, with AUD and NZD performing most solidly.
  • Market moves follow a further commitment on stimulus from the Chinese authorities overnight, who made a rare commitment to growth by pledging to ramp up policities targeting both the housing market and interest rates. The headlines clearly carried weight as the Politburo intervened - helping a strong positive close for Asia-Pac equities and a +4% rally in the CSI-300 just ahead of next week's Golden Week market holidays.
  • The firm risk sentiment has underpinned AUD and NZD, keeping AUD/USD within range of yesterday's highs of 0.6908 - clearance here would resume the primary uptrend to target the best levels since March of last year.
  • Meanwhile, JPY trades softer, helping USD/JPY build on yesterday's rally and target a concrete close above 145.00 today. The level has been pierced, but bulls will be eyeing a close above here to test the 50-dma of 146.49. Today's global equity rally will be helping thew theme.
  • Slippage in oil prices on the back of positive supply stories from Libya and Saudi Arabia have somewhat dented progress in CAD and NOK, which sit alongside USD at the bottom of the G10 pile. CHF outperforming JPY as the SNB declined a super-sized 50bps cut and opted for 25bps at this morning's decision.
  • Fed speak ahead is busy - with weekly jobless claims stats and the prelim August durable good orders the data highlights.