Now Looking At 0.6200

Overnight, the AUDUSD traded below 0.63 apart from two brief breaks above. It is now trading around 0.627. Again it underperformed most of the G10 (-0.4%), except SEK, NOK, GBP, due to the more dovish RBA, weaker commodity prices and risk aversion.

• AUDUSD broke through support at 0.6363, which was a bear trigger. The next support is yesterday’s low of 0.6248 but the focus is now on the round number support 0.6200. Yesterday’s break marks the resumption of the downtrend.
• AUD continued struggling against the kiwi with AUDNZD falling briefly below 1.12 overnight. It is now trading around 1.1235. AUD gained against GBP on UK financial stability fears and is now at 0.5715.
• Despite the USD losing some shine during the US session, it ended almost unchanged. Equity markets were generally lower with the S&P 500 -0.65% and the Eurostoxx -0.5%. VIX was up about 1pp to 33.6%.
• Oil prices were down overnight with WTI crude falling 2% to go below $90/bbl for the first time since Friday. Copper prices were down 0.3%, as global growth fears outweighed supply issues in metals markets. Chinese cuts to steel production weighed on iron ore and it’s trading just above $96.
• RBA Assistant Governor (Economic) Ellis will talk on the neutral rate this morning. The focus of the week remains US CPI for September on Thursday.