Aussie lower post FOMC

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AUD - Australian Dollar

The overnight session saw the Australian Dollar seesaw against its US counterpart. AUD/USD initially ascended from 0.7320 to 0.7344 before retreating back to 0.7280, well below the key 0.73 handle. With the Kiwi also rising against the greenback, AUD/NZD fell nearly 50 pips from 1.0880 to 1.0833.

Looking to the session ahead, domestic employment data is due out this morning. Despite July’s strong rebound, the unemployment rate is expected to come in higher than 7.5% as the shutdown in Victoria and slowdowns in employment growth in NSW begin to show. Traders will also be keeping an eye on GDP data due out of New Zealand and Eurozone inflation due out tonight for any clues about the state of global growth.

With the Australian Dollar oscillating around the 0.7300 handle heading this morning, topside resistance is still seen around the 0.7350 handle however with today’s employment report posing key risks, downside supports could be tested at the 0.7249 level.

Key Movers

The major event from overnight was the US federal Open Market Committee (FOMC) meeting which failed to surprise markets as the current policy stance was retained. The committee insisted rates will be kept at the current level few at least the next few years and reiterated it will aim for an inflation rate above 2% for some time.

The USD index was largely unchanged, rising only 0.2% however the EUR underperformed. EUR/USD fell from 1.8880 to 1.1788 during trade as ECB officials expressed concerns that the recent EUR strength was having a dampening effect on inflation. USD/JPY also fell below 1.05 to touch a six week low of 104.81.

Expected Ranges

AUD/USD: 0.7275 - 0.7350 ▼

AUD/EUR: 0.6120 - 0.6230 ▲

GBP/AUD: 1.7600– 1.7790 ▲

AUD/NZD: 1.0800 - 1.0900 ▼

AUD/CAD: 0.9600 - 0.9668 ▼

Author

OzForex Research

OzForex Foreign Exchange

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