Australian Dollar sticks to hawkish RBA and upbeat China GDP-inspired gains vs weak Yen

AUD/JPY builds on its recovery from a multi-month low for the second straight day.
Hawkish comments from RBA’s Kent and China’s upbeat GDP print boost the AUD.
The BoJ uncertainty weighs on the JPY, though intervention risks could limit losses.

The AUD/JPY cross attracts follow-through buying for the second straight day, recovering further from an eight-month low, around the 108.65 region, touched last Thursday. Spot prices stick to intraday gains through the first half of the European session and currently trade around the 110.35 zone, up over 0.60% for the day.

Análisis de TMGM: noticias de mercados financieros, calendario económico e información del mercado

The Australian Dollar (AUD) gains some positive traction in reaction to Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent's hawkish remarks, saying that there are reasonable indications that neutral interest rates are increasing both domestically and globally. Adding to this, data released from China showed that the economy grew by 4.5% year-over-year in the third quarter, better than consensus estimates and accelerating from 4.3% in the previous quarter. This further benefits the China-proxy Aussie, which, along with a mildly weaker tone around the Japanese Yen (JPY), acts as a tailwind for the AUD/JPY cross.

Media reports suggested last week that Bank of Japan (BoJ) officials see little need for a rare back-to-back interest rate hike in the absence of signs that upside inflation risks will increase abruptly, keeping JPY bulls on the back foot. Meanwhile, BoJ Governor Kazuo Ueda said earlier today that underlying inflation is approaching the central bank’s 2% target, signalling scope for further interest rate hikes. Moreover, traders remain on high alert amid speculation that Japanese authorities will step in to prop up the domestic currency, which helps limit the downside for the JPY and might cap the upside for the AUD/JPY cross.

Hence, it will be prudent to wait for strong follow-through buying before confirming that spot prices have bottomed out in the near-term and positioning for any meaningful appreciating move. Traders might also refrain from placing aggressive directional bets and opt to wait for the highly anticipated BoJ monetary policy meeting on October 29-30.

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Euro.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.22%	-0.02%	0.08%	-0.33%	-0.46%	-0.18%	0.04%
EUR	-0.22%		-0.24%	-0.11%	-0.54%	-0.68%	-0.40%	-0.18%
GBP	0.02%	0.24%		0.11%	-0.33%	-0.44%	-0.16%	0.05%
JPY	-0.08%	0.11%	-0.11%		-0.40%	-0.63%	-0.26%	-0.02%
CAD	0.33%	0.54%	0.33%	0.40%		-0.11%	0.15%	0.38%
AUD	0.46%	0.68%	0.44%	0.63%	0.11%		0.28%	0.51%
NZD	0.18%	0.40%	0.16%	0.26%	-0.15%	-0.28%		0.23%
CHF	-0.04%	0.18%	-0.05%	0.02%	-0.38%	-0.51%	-0.23%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

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