The AUD/USD opened in Sydney at $0.7790, at the low end of the $0.7786 to $0.7913 seen in offshore markets, US dollar strength the main theme following the better than expected US core inflation print. Aussie-dollar saw small gains to a high of $0.7815 as regional equity markets got off to a positive start, with the high traded just as the RBA released its private sector credit data. Soon after, aussie-dollar began to give up the gains and turned lower. The move was pinned on market indications which suggested a higher possibility of a RBA rate cut next week. Among researchers, calls for a rate cut were also getting stronger, with Deutsche Bank economists also joining in (JP Morgan changed view earlier today), now expecting a 25bps cut at the meeting. Aussie-dollar deflated in response, first to $0.7787 and then to a late low of $0.7778. It last traded at $0.7789. Support is noted at $0.7744, which is the 61.8% retracement of the aussie’s $0.7640 to $0.7913 rise, while initial resistance lies at $0.7831 (100 HMA).
