NZD: NZD/USD - Dragged Lower With Risk, Targets Pivotal 0.5500 Area
The NZD/USD had a range overnight of 0.5626 - 0.5670, Asia is trading around 0.5635. Looks like there could be more to this pullback in risk and the NZD is being dragged lower with the AUD as a risk proxy. The price action is interesting in that the NZD was able to move lower even with the USD back under pressure, I am a little wary of positioning in the NZD market but price action for the moment is re-assuring. Look for rallies to remain heavy while risk stays under pressure, with the 0.5600 target basically reached the next target will be the pivotal 0.5500 area.
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5600(NZD538m Nov12), 0.5800(NZD461m Nov 12) - BBG
Fig 1: NZD/USD Spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
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AUD: AUD/USD - Fails To Extend Above 0.6600, Drifts Lower As The USD Corrects
The AUD/USD had a range overnight of 0.6579-0.6602, Asia is trading around 0.6580. US equities upward momentum looks to be stalling for now and the USD is building on its recent reprieve. The AUD could not push above the 0.6625/50 resistance and has drifted lower from there in sympathy with the broader USD move and the risk backdrop looking a little toppy. This puts the AUD back in its recent range, and if the USD pullback continues to build the risk is skewed towards further losses, first support lies toward the 0.6475 area.
- Bloomberg - “Australia Home Rents Surge as Vacancy Sinks to Record Low. Australia’s home rental market tightened further in the third quarter, with the national vacancy rate sinking to a record low, in a setback for inflation prospects and hopes of near-term rate cuts. The Cotality Rental Value Index, which measures national dwelling rents, climbed 1.4% in the three months to the end of September, its largest quarterly gain since mid-2024. On an annual basis, rents jumped 4.3%.”
- “A Pentagon review of the AUKUS pact between the US, Australia and the UK is a “brass-tack” evaluation of its affordability and whether the agreement fits with President Donald Trump’s foreign-policy priorities, a Defense Department nominee said.” - BBG
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6300(AUD899m), 0.6725(AUD 398m). Upcoming Close Strikes : 0.6545(AUD607m Oct 10)- BBG
- Data/Event: Foreign Reserves
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
ASIA: Coming Up In Asian Markets On Wednesday
| 0200BST | 0900HKT | 1200AEDT | Philippines Aug Unemployment Rate |
| 0400BST | 1100HKT | 1400AEDT | Indonesia Sep Consumer Confidence |
| 0430BST | 1130HKT | 1430AEDT | Thailand Sep Consumer Confidence |
| 0800BST | 1500HKT | 1800AEDT | Thailand BoT Decision |
| 0930BST | 1630HKT | 1930AEDT | Hong Kong Sep FX Reserves |
Source: Bloomberg Finance L.P./MNI
ASIA: Coming Up In Asia Pac Markets On Wednesday
| 0030BST | 0730HKT | 1030AEDT | Japan Aug Labor Earnings |
| 0050BST | 0750HKT | 1050AEDT | Japan Aug BOP/Trade Balance |
| 0100BST | 0800HKT | 1100AEDT | Australia 2036 Bond Sale |
| 0200BST | 0900HKT | 1200AEDT | RBNZ Policy Decision |
| 0600BST | 1300HKT | 1600AEDT | Japan Sep Eco Watchers Survey |
Source: Bloomberg Finance L.P./MNI
