An overnight note from HSBC had a quick overview of AUD and NZD moves yesterday

The AUD has been the main underperformer overnight, weighed down by a sharp drop in iron ore prices.

  • Bloomberg reports that iron ore prices in Singapore fell as much as 4.4% overnight while those on the Dalian Commodity Exchange fell 3.5% to a three-week low.

The weakness in the AUD was in contrast to the NZD which held steady, helped by a robust reading of 56.0 for the services PMI for December.

  • The resilience of the service sector provided some reassurance after a sharp drop in the manufacturing PMI released last week.
  • The service PMI also showed an encouraging acceleration in employment.

AUD-NZD extended its decline. Having failed twice last week to break above 1.10, the market now seems inclined to test the downside.

Not too bad a summary from HSBC. Here is the AUD/NZD chart of late if you are inclined to have a punt on it with HSBC. Big level coming up though: