PBoC Fix Drives AUD After RBA Dep Gov's Speech

AUD has backed off its session lows printed as a Q&A session with RBA Dep Gov Debelle stole the limelight. In fact, the most recent downswing in AUD crosses seemed driven by softer than expected PBoC fix, with subsequent recovery occurring in sync with an analogical move in the yuan. At the same time, RBA's Debelle used the Q&A session to pour some cold water on the initial reception of his earlier remarks. Despite trading off lows as we type, the Aussie remains the worst G10 performer (save for NOK), after Debelle listed negative interest rates and FX intervention as policy options, adding that the RBA watches the exchange rate as a lower AUD would support economic recovery. These comments drew attention even as they came with a sense of doubt whether such policy measures would be effective, as RBA Dep Gov pointed to their various downsides.

• AUD/USD probed the water under its 50-DMA for the first time since April and last trades -16 pips at $0.7208. Familiar tech levels remain on the radar.
• AUD/NZD has shed 18 pips and sits at NZ$1.0816. A fall through the 100-DMA/Sep 18 low at NZ$1.0769/67 would open up Aug 3 low of NZ$1.0718. Conversely, a clean break above the 50-DMA at NZ$1.0843 (briefly penetrated early on) would shift focus to Sep 10 high of NZ$1.0936.
• AUD/JPY deals -22 pips at Y75.38, with bears looking for a dip through the 100-DMA at Y74.57, towards Jul 10 low of Y73.98. Conversely, a jump above the 50-DMA at Y76.30 would allow bulls to take aim at Sep 10 high of Y77.74.