AUD: AUD/USD - Consolidates Around 0.6550, Shrugs Off Risk-Off Worries
The AUD/USD has had a range today of 0.6538 - 0.6552 in the Asia- Pac session, it is currently trading around 0.6545, -0.10%. The AUD/USD has had a subdued session again as risk attempts to stabilise after its fragile start to the week. The AUD is consolidating around the pivot toward 0.6560-80 within its wider 0.6350-0.6700 range. On the day, I still think risk-reward probably favours a slight short skew but back above 0.6580 and the focus will turn to the highs of the range. On the day support should be seen back toward the 0.6500-20 area initially.
- MNI AU - Slight Q3 Net Export Detraction As Trade Surplus Narrows: Net exports detracted 0.1pp from Q3 quarterly GDP growth, which with the inventory print would normally pose a downside risk to consensus’ forecast of +0.7% q/q but public demand’s 0.4pp contribution is an upside risk. Q3 balance of payments was also released and not only did the current account deficit widen, when a narrowing was forecast, but it was revised substantially higher in Q2 to $16.2bn. Q3 was $0.4bn higher at $16.6bn, the highest since Q4 2024, as the trade surplus narrowed.
- MNI AU - Sideways Dwelling Approvals To Add To Housing Inflation: The number of building approvals fell 6.4% m/m in October, weaker than expected, after rising 11.1% m/m to be down 1.8% y/y. Multi-dwelling approvals have been driving the volatility in the headline number but annual growth in both it and private houses is soft and likely to add to already strong house price growth. Approvals have moved sideways this year.
- "ANZ NO LONGER SEES ONE FINAL RBA RATE CUT IN 1H 2026" - BBG
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6800(AUD532m). Upcoming Close Strikes : 0.6490(AUD710m Dec 4), 0.6500(AUD1.13b Dec 5) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 36 Points
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUSSIE 10-YEAR TECHS: (Z5) Returns Lower
- RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
- RES 2: 95.960 - High Apr 7 (cont.)
- RES 1: 95.900 - High Oct 17
- PRICE: 95.670 @ 16:16 GMT Oct 31
- SUP 1: 95.510 - Low Sep 3
- SUP 2: 95.415/95.300 - Low May 15 / Low Jan 14
- SUP 3: 95.275 - Low Nov 14 (cont) and a key support
Aussie 10-yr futures slipped lower Wednesday on the back of hotter-than-expected Australian inflation. This returned prices lower despite nascent signs of a technical recovery as recently as last week. The sustainability of the pullback will be dependent on prices holding above key short-term support at 95.510, the Sep 3 low. Near-term resistance remains 95.780, the Sep 12 high. A clear break of this level signals scope for a continuation higher and opens 95.960, the 76.4% retracement level for the Sep’24 - Nov’24 downleg.
AUSSIE 3-YEAR TECHS: (Z5) Struck by Strong CPI
- RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
- RES 2: 96.780 - High Jun 26 (cont)
- RES 1: 96.700 - High Sep 12
- PRICE: 96.375 @ 16:13 GMT Oct 31
- SUP 1: 96.280 - Low May 15 (cont.)
- SUP 2: 95.900 - Low Jan 14 (cont.)
- SUP 3: 95.760 - Low 14 Nov ‘24
Having bounced well on the back of the mild US CPI print, Aussie 3-yr futures reversed course Wednesday on strong domestic inflation data containing RBA cut pricing through 2026. This keeps prices well below prior resistance at 96.615, the Sep 12 high, and refocuses attention on 96.280 as the next major support.
FED: Gov Waller: Still Advocating For A December Rate Cut
Gov Waller, one of the FOMC's more prominent doves, makes clear in an appearance on Fox Business that he supports a follow-up rate cut in December. He makes reference to Chair Powell's press conference comment that the Fed could skip a cut at the December meeting due in part to a lack of official government data during the federal shutdown (Powell: “what do you do if you are driving in the fog? You slow down").
- Waller says today: "Right now, we know that the labor market has been weak... We know inflation is going to come back down. Inflation expectations are anchored, and in that world, the standard of central bank wisdom is to look through it and proceed with worrying about the labor market. So in my view, we should just look at what the data is telling us and proceed on policy that way.... So this is why I'm still advocating that we cut policy rates in December, because that's what all the data is telling me to do. The fog might tell you to slow down. It doesn't tell you to pull over to the side of the road. You still have to go. You may want to be careful, but it doesn't mean to stop, and ... the right thing to do with policy is to continue cutting."
- This is of particular interest since he appeared to suggest he would have a more cautious outlook on further easing after cutting in October.
