Commodity FX Battered, Aussie GDP Next

 All the gains commodity currencies gave on Monday were taken away on Tuesday.  The euro was the best performer while AUD lagged. Later, we might find out why the RBA was dovish when first quarter GDP numbers are released.1 of 3 AUDUSD trades is in progress, 1 GBPUSD short hit all targets, both of today's new EURUSD trades were filled, both EURJPY, both USDJPY,  2 USDCAD and the lone silver short remain in progress. All of the trades and rationale are shown in the latest Premium Insights.

The US dollar halted a three-day slide on Tuesday, rebounding strongly against the commodity currencies. The bloc fell almost constantly through Asian, European and US trading for cumulative losses exceeding 100 pips.

USD/JPY also climbed back above 100, reaching 100.42 before settling close to the big figure. The overall risk trade was negative with the S&P 500 falling 0.6% to break a streak of winning Tuesdays that dated back to the second week of the year.

Interestingly, the euro was able to resist the wave of dollar buying. Part of the reason was an MNI story that suggested that the ECB wasn't serious about negative rates, that it was simply a show of firepower. Euro resilience has been a consistent theme and could be pointing toward further gains, especially on the crosses.

At 2130 GMT, Australia releases the first reading on Q1 GDP. The consensus is 0.7% quarterly growth, about the same pace as Q42012. That pace of growth, which is about 2.8% per year, is expected to continue through 2014. Perhaps the RBA got an early look at GDP and that's why they were dovish yesterday?

Another number to watch is the May HSBC China PMI at 2145 GMT. This indicator carries much less weight than the manufacturing survey but traders are jittery about Chinese growth. The prior reading was 51.1.

Other events to monitor are the Australian AiG performance of services index and a speech from Fed hawk Fisher at 0000 GMT.