USD Trading Outlook
There was plenty of action in the crosses overnight and the AUD was firmly in the spotlight. EUR/AUD made a sharp move higher after the recent consolidation range was broken and AUD/CHF bore the brunt of risk-averse sentiment. The FOMC left US monetary policy unchanged and a spate of disappointing US economic data affected the traditional risk trades.
It should be a busier session today with China returning after a 3-day holiday and Chinese manufacturing PMI on the economic calendar.
With a week of holidays in China and Japan, the Asian FX market seems quite happy to sit quietly on its hands ahead of central bank meetings later this week. The ECB is expected to signify some imminent change to its refi rate, either in May or June. The AUD is being bounced around by flows and positional adjustments but I maintain my bearish medium-term outlook amidst falling commodity prices and a slowing Chinese economy.
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