AUD/USD: External drivers remain dominant and generally unsupportive – ING

FXStreet Insights Team FXStreet

The Australian Dollar is stronger after third-quarter inflation decelerated less than expected. Economists at ING analyze Aussie’s outlook.

The help to AUD/USD should be rather short-lived

The headline rate slowed from 6.0% to 5.4% (consensus 5.3%) and the trimmed-mean CPI rose 5.2% against 5.0% expectations.

The Reserve Bank of Australia Cash Rate future curve now prices in more than a 50% probability of a hike in November. Our base case has been that the RBA would have taken rates a nudge higher before ending its tightening cycle, and today’s figures endorse our expectations.

Still, the help to AUD/USD should be rather short-lived as external drivers remain dominant and generally unsupportive.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD looks offered just above 0.7100

AUD/USD has extended Monday’s pessimism, briefly breaching below the key. 0.7100 contention zone to hit three-day lows. The firmer tone in the Greenback has been keeping the Aussie under pressure while investors continued to gear up for the upcoming Trump-Xi Summit on Thursday.

USD/JPY holds small gains near 157.50 as JPY intervention risks loom

USD/JPY posts modest gains while trading near 157.50 in the Asian session on Tuesday as intervention fears help limit losses for the Japanese Yen. However, the BoJ's dovish rate hike to a 31-year high keeps JPY bulls on the back foot. Meanwhile, the US Dollar retains a bullish undertone amid the Fed's hawkish outlook and escalating Middle East tensions, providing tailwinds for the pair.

Gold makes a U-turn; focus shifts to $4,400

Gold regains balance and now trades with decent gains, approaching the key $4,400 mark per troy ounce on Tuesday. The yellow metal’s advance comes despite the resumption of the buying interest in the US Dollar, mixed US Treasury yields and geopolitical uncertainty.

Bitcoin reclaims key moving averages, altering bear cycle pattern

Bitcoin (BTC) may have altered its bear-cycle pattern after climbing above its 50-day, 100-day, 200-day, and 200-week moving averages, according to K33. In a Tuesday report, K33 noted that every time Bitcoin reclaimed all four major averages before now, it happened after the market had already established its cycle low.

Trump meets Xi: Why markets are watching this summit so closely

United States (US) President Donald Trump and Chinese President Xi Jinping are set to meet in Washington on Thursday for a summit closely watched by markets. After several months of easing trade tensions between the US and China, the meeting could determine whether the world's two largest economies extend their truce or enter a new period of uncertainty.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.