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High yielders remain under pressure - TD Securities

FXStreet (Łódź) - The TD Securities team of analysts discuss the reasons for the recent drop in the AUD and the NDZ.

Key quotes

"NZD took a beating following the release of a dovish RBNZ statement, one that pushed expectations for the next rate hike further into the future."

"The Kiwi is the worst performer amongst the majors today, as NZD/USD trades at 0.8177."

"The AUD, on the other hand, was flattered by a massive upside surprise in August employment, which printed at 121K vs. market expectations for a 15K reading."

"However, the initial move higher in AUD/USD has retraced in part as the market digested the details of the report — which showed the bulk of the gain was due to part-time employment, but also upon reflection that this report, although it might put to bed speculation of a rate cut by the RBA, still does not bring a rate hike any closer."

"Hence, AUD/USD is trading lower at 0.9130, close to yesterday intraday lows."

"A continued decline in commodity prices adds to downward pressures on these high yielders and reinforces the recent market dynamics we highlighted yesterday, which seem poised to extend the unwinding of carry trades on the likes of AUD and NZD."

"Between the two, the former appears to have the upper hand on the latter, and AUDNZD will likely trade higher into the mid-upper 1.12 area over the next few weeks, in line with our year-end target."

United Kingdom 30-y Bond Auction dipped from previous 3.53% to 3.17%

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