High Beta Currencies Pressured

High beta currencies came under pressure in a quiet, holiday thinned session in Asia as the greenback extended its rally to a third day. Volumes have been kept thin by market holidays in China, Japan, South Korea and Taiwan while the economic docket has been virtually empty.

• The negative tone stems from worries surrounding the giant Chinese property developer Evergrande, markets seem to have been hoping for some clarity from the company considering bond payments due this week, but lack of communication has seemingly compounded uncertainty.
• AUD is bottom of the G10 pile, AUD/USD has now dropped through its 20-day EMA and breached a 61.8% retracement level at 0.7248, support is seen at the Aug 27 low of 0.7222. Further pressure was exerted on the pair as iron ore extended its slump below $100/ton.
• NZD also losing ground, data earlier showed Performance of Services Index slipped to 35.6 in Aug from a revised 55.9 in July.
• Market focus will be firmly on the FOMC decision/statement on Wednesday this week. Other notable central bank meetings include the Bank of Japan, Swiss National Bank and the Bank of England.