Looks like some of the regional central banks are trimming AUD/USD longs as the global green shoots begin to wilt a bit. Very large amounts of AUD were bought by an army of US custody banks this morning (more than AUD 500 mio, we hear) but prices pulled back quickly from the 0.7570 highs.Good offers are seen just below 0.7600, we hear.
AUD/USD was the leader of the reflation trade. If it can’t rally despite a bounce from support in US equities than the reflation trade may be in for a spot of trouble in the medium-term.
EUR/USD is stalling near 1.3600, holding shy of overnight highs in the 1.3620s.
UPDATE: We’re just hearing talk of a confidence vote in the Australian parliament over the budget, though we have not seen it on the wires yet. A lost confidence vote would result in fresh elections, more than likely…Stay tuned.
