AUD/USD extends 5-day losing streak post-PPI

• Spot dips to 0.7644; lowest since July 12
• Aussie PPI cools, weak inflation kills the already low odds of the RBA rate hike
• Yield differential drops in AUD-negative manner

AUD/USD extended the 5-day losing streak to a low of 0.7642 on weak Aussie PPI release.

Inflation, as measured by the Producer Price Index (PPI) dropped to 0.2 percent q/q in the third quarter from the previous quarter's 0.5 percent reading. In annualised terms, PPI cooled to 1.6 percent from 1.7 percent.

The data released earlier this week also showed that consumer price inflation cooled in the third quarter. Meanwhile, strong Aussie is also importing deflation, showed the import price index released yesterday.

Consequently, the Aussie is losing height against the USD. The 10-year AU-US yield spread dropped to 32 basis points today; its lowest level since July 7.

AUD/USD Technical Levels

Jim Langlands from FX Charts says there is merit in being short on the Aussie dollar. He writes, " the Aud looks heavier by the day and staying short, looking to add to the position seems to be the plan today. 0.7690/0.7715 should provide decent resistance as we look for a run towards 0.7630 and below that, eventually towards 0.7570. Sell AudUsd @ 0.7715. SL @ 0.7760, TP @ 0.7630"