Snapshot: AUD/USD trades at 0.7169, down 0.12% on the session, as markets remain unconvinced by the RBA’s hawkish hold. Australian yields are slightly firmer, with the 2Y at 4.564%, but this hasn’t provided sufficient support given the underlying dovish bias. Focus shifts to 10:00 ET ISM Manufacturing PMI.
- Watch for a break below 0.7160; failure to hold this level could trigger a deeper slide as positioning remains moderately long.
- Powell’s speech at 20:30 ET is a key risk; hawkish comments could amplify USD strength and pressure the Aussie further.
Bias into NY: Expect continued downside pressure on AUD/USD. The RBA’s reluctance to signal a cut path contrasts with market pricing of a move later this year, and with a moderately long net speculative position in the Aussie, a break lower looks likely. The US-AU 10Y spread at -42bp favours USD strength into the NY session.