It has been a sterling recovery off its London lows yesterday at 0.9157 for AUD /USD. The pair was boxed into a rather contained 0.9240-75 range until late in Asia when buyers got the upper hand. Whilst the pair slipped late in the session in sympathy with EUR/USD and GBP/USD it continued to gain on a cross basis. The RBA minutes played a role with expectations of a May rate hike moving from 25% chance to a 30% chance. The RBA presented their usual strong case based on their Asian outlook (vis a vis V-shaped recovery) . This hawkish view was in stark contrast to the view in NZ where we got an unexpected weak CPI reading in March resulting in a swift 100 pip jump in the AUD/NZD. Meanwhile after getting “creamed” on Friday and Monday, AUD/JPY broke above 86.00 at one stage in a near 2.5% up move from its 83.93ish low yesterday in London.

All up selling AUD/USD remains a hit and run game. Long term bears are getting killed on the daily rolls whilst longs remain smug knowing they are backed by firm fundamentals.