FOREX: Hawkish Powell Sees AUDUSD Give Up Post-Au CPI Gains

While the 0.3% rise in the US dollar BBDXY meant that most of the G10 fell against the greenback, Aussie was one of the outperformers with AUDUSD down 0.2% to 0.6574. It was trading above 0.6600 reaching a high of 0.6618 before the Fed decision and Chair Powell’s press conference. While the Fed cut rates 25bp as expected, Powell raised doubts over the December meeting commenting that FOMC members feel a pause could be prudent especially given that the lack of data means “you can’t see as far ahead”. 

• AUDUSD is currently around 0.6574 off Wednesday’s low of 0.6557. Powell’s comments unwound all of the pair’s gains following Australia’s materially higher-than-expected Q3 CPI data which has essentially ruled out a November RBA cut with only an 18% chance for December priced in.
• AUDUSD’s bull cycle remains intact and clearance of 0.6629 would strengthen the bullish condition. Initial support is at 0.6543, the 50-day EMA.
• NZDUSD reached a high of 0.5802 but the break above 0.5800 was short-lived even before the Fed. It then fell to a low of 0.5749 and finished down 0.3% to 0.5764. It is currently around 0.5761.
• Aussie’s outperformance left AUDNZD up 0.2% to 1.1408. The pair rose sharply to above 1.14 following Australia’s CPI and held above the level for most of the day. It is currently trading at 1.1410. The more dovish RBNZ versus the cautious RBA is helping to drive the pair higher.
• Today ANZ’s NZ business survey for October and Australia’s Q3 export and import prices are released.