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US Dollar Weakness Extends, GBPAUD Rallies 1.30%

FOREX
  • Bull steepening across the US yield curve following the surprisingly large decline for US JOLTS job openings to 9.93M (cons 10.50M) prompted further greenback weakness on Tuesday. The USD index has declined another 0.5% and is now trading below the March lows of 102.00 turning the focus to the February lows at 100.82.
  • The broad dollar weakness has prompted strength across the majority of G10 currencies, with GBP and CHF the notable outperformers. GBP spent the US session consolidating its prior advance after cable broke a confluence of resistance points between 1.2425-50.
  • On the other end of the spectrum, AUD is the notable laggard, falling after the RBA held rates at 3.6%. The RBA board watered down previously hawkish forward guidance as the bank noted in the final paragraph that some further tightening "may" be needed, at the previous meeting the board had noted further tightening will be needed. GBPAUD has erased the entirety of yesterday’s decline, rallying an impressive 1.3% to trade at the highest level since February 2022.
  • The lower US yields assisted a very strong rebound for the Japanese yen. USDJPY fell over 1% from the earlier 133.17 high to trade just north of 131.50 ahead of the APAC crossover.
  • EURUSD continued to make ground above noted 1.0930 resistance which represents a key short-term hurdle for bulls. A clear break would reinstate the recent bull theme and signal scope for a move towards 1.1033, the Feb 2 high. Worth noting there is currently 4.266B worth of options expiries at 1.0900 for tomorrow's NY cut which could potentially limit the topside momentum.
  • A step down to 25bp from February’s 50bp is widely expected for the RBNZ overnight. Focus will then be on US ADP employment data and the US ISM Services PMI.
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