The Australian dollar is under the pump, especially against the crosses

Jeff J Mitchell/Getty Images

The Australian dollar remained under pressure overnight against both the US dollar and the crosses, reflecting the risk-off tone seen during the session.

Here’s the scoreboard as at 8.25am AEST.

AUD/USD 0.7553 , 0.0003 , 0.04%
AUD/JPY 84.11 , 0.05 , 0.06%
AUD/CNH 5.1592 , 0.0021 , 0.04%
AUD/EUR 0.6763 , 0.0004 , 0.06%
AUD/GBP 0.5959 , 0.0001 , 0.02%
AUD/NZD 1.0431 , -0.001 , -0.10%

While the Aussie fell modestly against the US dollar, it came under significant selling pressure against the crosses, particularly the UK pound and New Zealand dollar.

The AUD/GBP slumped 0.7% for the session, drilled lower by hawkish remarks from Bank of England chief economist Andy Haldane who is also a voting MPC member.

“Haldane admitting that he did consider voting for a rate hike last week and although in the end he sided with the 5-3 majority to stand pat, noting that the risks of tightening ‘too early’ have shrunk as growth and inflation have shown greater resilience than expected,” said Rodrigo Catril, currency strategist at the National Australia Bank.

Catril said those remarks saw the pound rally across the board with expectations for a December hike jumping from 20% to 44%.

The Aussie was obviously not immune the pound’s strength.

AUD/GBP 5-Minute Chart

Nor did the Aussie perform well against the New Zealand dollar, slumping in the wake of the Reserve Bank of New Zealand’s (RBNZ) latest interest rate decision released earlier today.

While the bank left the cash rate unchanged at 1.75% and retained a neutral rates bias, the tone of its statement was less dovish than what the markets had been expecting, sending the Kiwi sharply higher.

AUD/NZD 5-Minute Chart

Whether the selling pressure the Aussie came under on Wednesday will be repeated today will largely be determined by sentiment and technicals rather than fundamental factors with absolutely no market moving events scheduled domestically, regionally or abroad.

There’s a smattering of releases scheduled in Europe and North America although none appears likely to generate any volatility in the Aussie dollar.

Given the quiet data calendar, movements in the Japanese yen — often influential on sentiment levels in Asia — along with those in Chinese commodity futures, will likely be influential on the Aussie today.

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