The Australian and New Zealand {dollars} are working away with the thought of an extended potential Fed pause, simply hours earlier than the most recent resolution. NZD/USD is up 1.0% and AUD/USD up 0.75% because the pairs rally following softer US producer costs.
There could also be additionally one thing of a pivot in the direction of Asian-levered property with China decreasing charges this week and poised to do extra on Thursday (and once more subsequent week). That might assist clarify why CAD is trailing its commodity counterparts even with oil up 1.1% right now.
Technically, AUD/USD is in an fascinating place right here because it edges above the Could excessive of 0.6818.
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The drop to 0.6500 is trying like a faux breakdown and people may be adopted by highly effective reversals. If Powell sounds sufficiently dovish right now and the PBOC follows via with cuts, there’s loads of gasoline for a run to the 2023 excessive of 0.7150.
