Less Hawkish Powell Boosts AUD

The AUDUSD jumped to 0.6801 as Fed Chairman Powell’s comments were less hawkish than expected. The DXY fell 1.2% from its high after he said that the time to moderate “may come as soon as the December meeting” but then he noted that the terminal rate will probably be revised higher and stay there longer. AUDUSD is now trading around 0.6790.

• Commodity currencies did well with the risk-on move and the AUD outperformed most of the G10 but not the NZD. AUDNZD is now trading around 1.077. AUDJPY trended higher overnight and is now 93.70. AUDEUR is also higher at 0.6525.
• A clear break of 0.6797, the November 15 high, would open up the uptrend with 0.6909 the third resistance level. Firm support lies at 0.6589, the 50-day EMA.
• Equity markets were broadly higher with the S&P 500 soaring 3.1% after Powell’s comments. Eurostoxx and the FTSE rose 0.8%. Oil prices were about 3% higher with WTI now at $80.40 and Brent $86.70. Crude was boosted by optimism on increased Chinese demand, lower US inventories and uncertainty around the OPEC+ meeting. Copper prices were up around 4%. Iron ore is also higher at around $102.
• Today in Australia the final S&P global manufacturing index for November prints and there is Q3 capex data. In the US, there is the ISM and some Fed speakers.