This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
The Labour Market Conditions Index was the only major release and showed slow jobs momentum in September. This reading combines 19 labour market variables and showed a moderation in the reduction of slack. This was enough to trigger some profit taking on a hot USD, with the dollar index dropping from a four-year high. The AUD was one of the best-performing currencies against the greenback as a recovery in commodities and emerging markets aided a reversal.
Traders still looking to sell into strength
AUD/USD saw January lows hold and we’ve witnessed a big rally from that support level. The RBA won’t be pleased and are therefore likely to continue talking the currency down today. Today’s RBA meeting isn’t really expected to bring anything new, but there is a chance there’ll be some commentary around the property market and perhaps the AUD.
However, I still don’t expect anything groundbreaking from today’s meeting. While there is still resistance in the $0.88 region, it could run a bit further today before fresh selling kicks in. Despite this, bias remains to the downside. Any Fed commentary this week will be key.