After hitting a low of 0.6699 overnight the AUDUSD has bounced back and is currently trading close to 0.677. There was a general recovery versus the USD with the AUD +0.5% but it was outperformed by the EUR, NZD, CHF and SEK. EUR was supported by the fall in energy prices.
- With better risk sentiment, AUDJPY has started the day up to 97.32 after a low yesterday of 96.0. But the same trend meant that the AUD lost versus the NZD with AUDNZD now trading at 1.1142.
- The DXY lost 1.1% from its highs after Fed voter Brainard's comments were seen as relatively dovish. The Beige book also reported an easing of inflation pressures. US equities were also higher on these remarks with the S&P 500 +1.4%. And the VIX fell sharply back sub 25%.
- The bearish trend in AUD remains though with the first resistance level at 0.6833, the September 6 high.
- In the commodity space, oil prices fell around 5.5% and gas prices were down again. Base metals were generally higher, with aluminum the exception. Iron ore was stable around $97.00.
- Australian trade data for July are released today with the trade balance expected to narrow to A$14.65bn from A$17.67bn previously, driven by weaker exports (-8%m/m consensus). Imports are forecast to be flat.
- At 13.05 AEST, RBA Governor Lowe is scheduled to speak on “Inflation and the monetary policy framework”. His talk will be followed by a Q&A session, which is likely to be the main market focus of the event, as participants try and ascertain the size of the next RBA move.