AUD in a tailspin as domestic economy edges toward recession
Written by
Daily Currency Update
The Australian dollar tumbled through trade on Wednesday, marking a fresh 4-month low. Weaker than expected Q3 GDP data sent the AUD downwards, breaking off levels just below US$0.6490 to crash through supports at US$0.6440/50 and eye a break below US$0.64. The economy expanded just 0.3% in the September quarter, well short of market estimates. With the US dollar following treasury yields higher, the AUD is now poised to extend its post-election downturn south of US$0.64. Having recovered to trade back above US$0.6420 we are closely monitoring any consolidated move below this handle. An extended break lower opens the door for the AUD to test August and April lows near US$0.6350.Our attention now turns to commentary from Federal Reserve Chair Jerome Powell. We're looking for any clues as to what the FOMC will do when it meets later this month.
Key Movers
The US under performed against most major counterparts on Wednesday as weaker than anticipated ISM services data and moderate leading payroll indicators forced Treasury yields to drift lower. The ISM services index was weaker than expected and well below the lowest market estimate. Policy uncertainty and looming tariffs elevated market nerves. The euro clawed its way back above 1.05 while the pound tested a break above 1.07. With US treasury yields lower, the yen fought off a break above 151 while the Chinese yuan pushed the dollar back toward 7.26. In other news, the South Korean won has recovered much of yesterday’s losses after President Yoon lifted orders for the imposition of Martial Law.Our attentions today turn to commentary from Jerome Powell ahead of tomorrow’s all important US non-farm payroll print.
Expected Ranges
- AUD/USD: 0.6350 - 0.6480 ▼
- AUD/EUR: 0.6080 - 0.6200 ▼
- GBP/AUD: 1.9500 - 1.9900 ▲
- AUD/NZD: 1.0950 - 1.1050 ▼
- AUD/CAD: 0.9000 - 0.9120 ▼