Aussie Dollar slips against the Greenback heading towards 78c
Monday 23rd of October
The Australian dollar edged lower into the close on Friday slipping below 0.7850 as the U.S dollar gained new momentum on the promise of Republican tax reform. Touching intraday lows at 0.7806 the AUD was driven lower by increased expectations the U.S tax reform will pass through both the House and Senate despite widespread condemnation from Democrats. Buoyed, the U.S dollar made its largest daily advance in more than a month and forced the Aussie lower as domestic drivers remained thin. The Australian dollar remains at the mercy of monetary policy expectations and with the RBA vehemently sticking to a neutral policy standing the short-medium term outlook remains bearish. Attentions now turn to Wednesday’s CPI print as the weeks big ticket macroeconomic item and while a strong read may put pressure on the RBA it is unlikely to drastically amend the timeline for a rate hike locally and we expect the AUD to meet resistance on moves approaching 0.79/0.7910.