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■ The AUD/USD pair dipped below 0.6400 momentarily after revisiting last week’s 0.6434 low. This decline can be attributed to both falling commodity prices and a shift in Australian interest rate expectations. Yesterday saw Australian 3-year government bond yields plummet over 10bp, following yet another lackluster economic performance in Q3 2024.
■ The AUD/EUR slid to 0.61, pressured by Australia’s lower interest rates. Neither EUR/USD nor AUD/EUR reacted to the French government’s no-confidence vote loss, likely due to its predictability. An interim government is expected until mid-2025 elections. The euro’s vulnerability without a stable government could bolster AUD/EUR. President Macron’s next move could sway the markets, with potential for AUD/EUR gains if he resigns or forms a non-centrist coalition.
■ AUD/NZD continues to trade under 1.10, weighed down by New Zealand’s thriving commodity prices. Whole milk powder saw a 4.1% surge yesterday.
■ AUD/JPY experienced volatility amidst policy uncertainties in the US, Korea, and France. The pair could face further pressure if Japanese wage growth accelerates. Bank of Japan’s Governor Ueda has hinted at a potential rate hike tied to wage growth. Markets will closely watch BoJ Board member Nakamura’s speech for any December rate hike signals. However, global factors are likely to remain the primary driver for AUD/JPY movements.
Mid-market rates.
| Currency Pair | Mid-market Rate |
| AUD/USD | 0.6428 |
| AUD/NZD | 1.0988 |
| AUD/JPY | 96.80 |
| AUD/CNY | 4.6798 |
| AUD/EUR | 0.6115 |
| AUD/GBP | 0.5061 |
| AUD/HKD | 5.0028 |
Chart of the day
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