USD Soft on Rising Fed Rate Cut Bets, AUDUSD Eyes RBA Rate Cut - US Market Open

AUD: Notable outperformance in high beta currencies despite the cautious market tone. The AUD is now hovering at 2-week highs against the USD, ahead of the likely RBA rate cut. However, given that markets remain very bearish on the currency, there is a risk of a short vulnerable if the RBA fail to live up to the aggressive dovish pricing. Of note, money markets are pricing in three RBA rate cuts by the year-end.

GBP: The Pound remains soft across the board with EURGBP edging back towards its recent peak (0.8870). Todays Mfg. PMI surprised to the downside with the headline figure dropping to the lowest level since July 2016 amid the unwind of Brexit related stockpiling. Going forward, the Pound is likely to take its cue from the Conservative Party leadership contest throughout the next few weeks.

Source: DailyFX, Thomson Reuters

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--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

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