Weak GDP figures saw interest rates traders fully price in three 25bp RBA cuts by Feb 2026. And AUD/USD could have traded much lower on Wednesday, were it not for a stronger yuan coming to the Aussies rescue later in the day.
By :Matt Simpson, Market Analyst
AUD/USD was the weakest forex major on Wednesday following weak growth figures for Q3. At 0.8% y/y, it was the slowest GDP figure in four years and beneath the 1.1% estimate, while the 0.3% q/q print also missed its forecast of 0.5%.
Interest rates traders have now fully priced in a 25bp cut for April, which could mark the RBA’s first act of easing in over four years to take the cash rate from 4.35% to 4.1%. Two more 25bp cuts have also been priced in for August 2025 and February 2026, which assumes a cash rate of 3.6% - a level not seen since April 2023. The 2-year yield fell -13bp during its worst day in nearly five months.
Of course, we will need to wait for the quarterly CPI figures in January for confirmation of whether the RBA really will begin cutting in the first half of 2024, but for now at least the risks of them doing so are now on the radar.
Click the website link below to get our Guide to central banks and interest rates in Q4 2024.
forex.com
See the expectations for the Fed, ECB, and BOJ...and more importantly, what could drive monetary policy in Q4 and beyond!
I had warned of the growing risks of a downside break for AUD/USD in the weekly outlook, and Australia’s weak GDP was the trigger to send the Aussie to an 8-month low. Yet it has managed to recoup around half of the day’s losses thanks to the strength of the yuan.
The Chinese yuan has been the bigger driver for the Australian dollar in recent months, even more so that the AU-US 2-year yield differential. And it could be thanks to USD/CNH retracing lower from the July high that AUD/USD was able to recover from 64c at the day’s low.
Given the significance of the resistance level on USD/CNH, I suspect AUD/USD will be able to hold above 64c for now. But a break above the July high suggests the Aussie could be headed for the August low around 0.6350.
As noted in last week, while the USD tends to be bearish in December, price action is choppy and erratic heading towards Christmas. This could translate to AUD/USD being better suited on a ‘per day’ basis for traders, with the potential for a cleaner bullish move to develop on AUD/USD after December 20th when the USD tends to deliver bearish daily returns.
Click the website link below to get our exclusive Guide to AUD/USD trading in Q4 2024.
forex.com
If the RBA is able to stick to its plan and keep monetary policy unchanged, AUD/USD may stick to its bullish seasonal trend in Q4, though volatility could increase.
View the full economic calendar
– Written by Matt Simpson
Follow Matt on Twitter u/cLeverEdge
forex.com
Weak GDP figures has seen interest rates traders fully price in three 25bp RBA cuts by Feb 2026. And AUD/USD could have traded much lower on Wednesday, were it not for a stronger yuan coming to the Aussies rescue later in the day.
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
1 post - 1 participant
Read full topic
By :Matt Simpson, Market Analyst
AUD/USD was the weakest forex major on Wednesday following weak growth figures for Q3. At 0.8% y/y, it was the slowest GDP figure in four years and beneath the 1.1% estimate, while the 0.3% q/q print also missed its forecast of 0.5%.
Interest rates traders have now fully priced in a 25bp cut for April, which could mark the RBA’s first act of easing in over four years to take the cash rate from 4.35% to 4.1%. Two more 25bp cuts have also been priced in for August 2025 and February 2026, which assumes a cash rate of 3.6% - a level not seen since April 2023. The 2-year yield fell -13bp during its worst day in nearly five months.
Of course, we will need to wait for the quarterly CPI figures in January for confirmation of whether the RBA really will begin cutting in the first half of 2024, but for now at least the risks of them doing so are now on the radar.
Click the website link below to get our Guide to central banks and interest rates in Q4 2024.
Central Banks Q4 2024 Market Outlook - FOREX.com US
See the expectations for the Fed, ECB, and BOJ...and more importantly, what could drive monetary policy in Q4 and beyond!
- Wall Street reached record highs after Jerome Powell thanks to strong earnings from Salesforce and Jerome Powell’s comments on a strong US economy
- The Nasdaq 100 led the rally with a 1.2% rise on the day, with the Dow Jones up 0.7% and S&P 500 up 0.6%
- Bitcoin also rallied 3% and retested 99k (just shy of its record high) after Powell likened it to gold
- Oil prices were sharply lower ahead of today’s OPEC meeting (with an extension of output cuts expected), and EIA data showed a larger-than-expected draw on stockpiles last week
AUD/USD, USD/CNH technical analysis
I had warned of the growing risks of a downside break for AUD/USD in the weekly outlook, and Australia’s weak GDP was the trigger to send the Aussie to an 8-month low. Yet it has managed to recoup around half of the day’s losses thanks to the strength of the yuan.
The Chinese yuan has been the bigger driver for the Australian dollar in recent months, even more so that the AU-US 2-year yield differential. And it could be thanks to USD/CNH retracing lower from the July high that AUD/USD was able to recover from 64c at the day’s low.
Given the significance of the resistance level on USD/CNH, I suspect AUD/USD will be able to hold above 64c for now. But a break above the July high suggests the Aussie could be headed for the August low around 0.6350.
As noted in last week, while the USD tends to be bearish in December, price action is choppy and erratic heading towards Christmas. This could translate to AUD/USD being better suited on a ‘per day’ basis for traders, with the potential for a cleaner bullish move to develop on AUD/USD after December 20th when the USD tends to deliver bearish daily returns.
Click the website link below to get our exclusive Guide to AUD/USD trading in Q4 2024.
AUD USD Q4 2024 Market Outlook - FOREX.com US
If the RBA is able to stick to its plan and keep monetary policy unchanged, AUD/USD may stick to its bullish seasonal trend in Q4, though volatility could increase.
Economic events in focus (AEDT)
- 10:00 – JP Reuters Tankan
- 10:50 – JP foreigner bond and stock purchases
- 11:30 – AU trade balance
- 12:30 – JP BOJ board member Nakamura speaks
- 14:35 – JP 10-year JGB auction
- 16:00 – SG retail sales
- 21:00 – OPEC meeting
- 21:00 – EU retail sales
- 23:30 – US job cuts
- 00:30 – US jobless claims
- 03:30 – US FOMC Barkin speaks
View the full economic calendar
– Written by Matt Simpson
Follow Matt on Twitter u/cLeverEdge
AUD/USD saved by the yuan, though April cut fully priced for RBA
Weak GDP figures has seen interest rates traders fully price in three 25bp RBA cuts by Feb 2026. And AUD/USD could have traded much lower on Wednesday, were it not for a stronger yuan coming to the Aussies rescue later in the day.
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
1 post - 1 participant
Read full topic
