AUD falters amid a shift in Federal Reserve rhetoric

Daily Currency Update

AUD - Australian DollarThe Australian dollar fell overnight as investors adopted a risk-off mantra driving a depreciation across equities, commodities and risk led currencies. The AUD fell nearly 1% as commodity prices came under pressure following commentary from China, wherein it warned about the current outperformance and called for stricter market oversight. Copper fell some 3% while oil gave up 5%, forcing the AUD toward 0.7750. The AUD then met further selling pressure upon the release of the Fed's FOMC meeting minutes. Markets expected the meeting accounts would affirm policymaker's commitment to accommodative monetary policy and a will to look through transitory inflation pressure. Instead, the April minutes showed that several members thought it was time to 'begin discussing' a tapering to its current bond-buying program. Markets jumped on the shift in rhetoric and drove the USD higher, forcing the AUD toward intraday lows at 0.7710 before edging marginally higher into this morning open where it buys 0.7722 US cents. Attentions today remain with the broader risk narrative while domestic labour market and unemployment data headline the macroeconomic ticket. A strong uptick in job creation and further depreciation in the unemployment rate would signal sustained recovery across the economy despite the rollback in government supports and possibly help push the AUD back toward the top end of recent ranges. That said, a disappointing print could compound the risk-off move and force the AUD toward key supports at 0.7680.