USD Trading Outlook (29-01-2015)

AUD/USD O/n carry-over highs from a weak USD following Tues’s weak Durables report was followed by selling in early London and a second small slide after the Fed statement kept the patient tightening scenario intact. AUD/USD fell to 0.7900 during the Asian morning session when the MAS surprised by lowering the slope of its NEER, which was viewed as a form of easing. It rallied when Aus CPI was released and showed underlying inflation was a bit hotter than expected. The IOS was pricing in a 40% chance of a RBA easing next week before the AUD CPI and below 10% in the aftermath of the release. Another tumble in commodity prices, particularly oil, after US storage levels exploded for a second week in a row, isn’t helping commodity ccys amid relentless drops in industrial metals and coal prices and another drop in China’s growth target to 7% and chatter about yuan weakness. This week’s o/s bounce has run out of gas before even threatening a close above the Dec 23 high & daily pivot pt at 0.8056. Bids by 0.7900 hold so far in the FOMC aftermath.