Broad General Collateral Rate (BGCR): 4.32% (-0.01), volume: $899B
Tri-Party General Collateral Rate (TGCR): 4.32% (-0.01), volume: $868B
(rate, volume levels reflect prior session)
FOREX: AUDUSD Extends Weekly Decline to 1.2%, Q4 CPI Data Awaited
Jan-28 13:15
Monday’s risk off session and the more optimistic tone for the US dollar today have prompted AUDUSD to extend its pullback this week. The pair has dropped 1.2% from last Friday’s close, keeping medium term bearish conditions intact.
Recent gains stalled at resistance around the 50-day EMA (intersecting at 0.6325), and the subsequent reversal lower suggests the possible end of the correction between Jan 13 - 24.
The NAB Business Survey report was out overnight and highlighted softer wage pressures, with labour cost growth at 1.4%, ahead of key quarterly inflation data scheduled on Wednesday that may prompt the RBA to consider rate cuts. Q4 CPI is expected to show a drop to 2.5% from 2.8% y/y prior. RBA-date OIS is pricing in an 80% chance of a 25bps cut at the Feb meeting, firming 2bps overnight.
A continuation lower for AUDUSD would bring the focus back on 0.6131, the Jan 13 low and the bear trigger. On the upside, a clear breach of the 50-day average is required to signal scope for a stronger recovery.