The Australian dollar was hammered on Wednesday, falling heavily following the release of Australia’s September quarter inflation report.
Here’s the scoreboard as at 7.15am AEDT, revealing the scale of the declines.
AUD/USD 0.7697 , -0.0078 , -1.00%
AUD/JPY 87.56 , -0.99 , -1.12%
AUD/CNH 5.1091 , -0.0547 , -1.06%
AUD/EUR 0.6521 , -0.0089 , -1.35%
AUD/GBP 0.5807 , -0.0111 , -1.88%
AUD/NZD 1.1196 , -0.0066 , -0.59%
AUD/CAD 0.9854 , 0.0004 , 0.04%
Aside from against the Canadian dollar, the Aussie copped a drubbing, undermined by a weak inflation report which diminished the odds of a RBA rate hike arriving next year.
After opening the session at .7775, the AUD/USD has now fallen back below the 77 cent level for the first time since July 13.
The inflation report, a raft of strong US economic data and technical selling explain the scale of the Aussie’s fall, easily managing to offset continued squabbling in Washington.
As seen in the 4-hourly chart below, the AUD/USD is currently sitting at a level that acted as resistance in the past.
Against the crosses, the Aussie was hit even harder against the UK pound and euro — the former due to the release of a stronger-than-expected Q3 GDP report, the latter on the back of strong German economic data and position adjustments ahead of today’s ECB monetary policy meeting.
Even with the substantial declines recorded elsewhere, the Aussie still managed to outperform its Canadian namesake during the session.
The Bank of Canada announced its October interest rate decision earlier in the session, delivering a cautious and somewhat dovish policy statement which saw the odds of a further rate hike this year diminish even further.
Looking to the day ahead, it’s likely to be a quiet one in Asia after the fireworks on Wednesday.
There’s very little on the calendar aside from a speech from RBA Assistant Governor Guy Debelle at 6.45pm AEDT. It’s entitled “Uncertainty”. One to watch out for, especially following Australia’s weak inflation report released yesterday.
Later in the session, activity levels will pickup with the ECB holding its October monetary policy meeting.
“The ECB policy decision is expected to see an extension and tapering of their asset purchase program,” says Imre Speizer, senior market strategist at Westpac. “The current program of €60 billion per month is set to expire in December with the new program expected to be reduced initially to around €30-40 billion per month.”
The interest rate decision will be announced at 10.45pm AEDT. That will be followed 45 minutes later by ECB President Mario Draghi’s press conference.
Beside the ECB decision, markets will also receive initial jobless claims, goods trade, pending home sales and the Kansas City Fed manufacturing index from the US later in the session.
Neel Kashkari of the Minneapolis Fed is also scheduled to deliver a speech. He’s a noted policy dove.