Australia 3Q CPI came out lower than the forecast, 0.6% qoq and 1.8% yoy vs 0.8%, 2.0% expected, Australian bond yields coming lower across the curve weighing on the currency.

AUD$ dropped 30 pips immediately and continue trading soft now approaching 0.7723 low seen earlier this month.

Market is now pricing in about 60% chance of 25bp hike before Sept 2018 by the RBA, lower from over 70% prior to the number.

AUD$ Levels to watch

  • 0.8125 ytd high
  • 0.7897 Oct high
  • 0.7830 100d MA
  • 0.7723 previous low
  • 0.7694 200d MA
  • 0.7643 50% retrace of Low-High ytd.