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Geopolitical risks continue to hamper the Australian dollar

AUD - Australian Dollar

The Australian dollar saw a steady decline overnight as geopolitical headlines continue to dominate headlines. Opening Wednesday morning on the 68 US cent support line, there was no respite for the local currency as it moved south over the past 24 hours of trading. A key focus has been on the announcement of an impeachment inquiry for the President of the United States of America hitting risk appetite as the AUD/USD reached lows of 0.6739 overnight.

It has been quiet on the domestic front this week in way of macroeconomic data with a focus towards monetary policy dominating headlines. RBA Governor Philip Lowe is under pressure to provide further stimulus to the Australia economy with markets pricing a 75% chance of a rate cut at next Tuesdays monetary policy meeting.

The Australian Dollar is currently trading at 0.6752. We expect support levels to hold on moves approaching 0.6720, while any upward push will likely meet resistance at 0.6805.

Key Movers

Headlines across America emblazoned with an impeachment inquiry against President Donald Trump were announced by speaker Nancy Pelosi. The US Dollar Index (DXY) continued its uptrend as the greenback pushed higher against a basket of currencies, topping out at the 99.06 and a retest of two-year highs.
Supported in its movements higher was the release of new home loans in the United States as low mortgage rates stimulate the housing market. An increase by 7% in August and to a 12 year high showed sales of single-family homes were showing signs of strong improvements.

Rulings in the UK by the Supreme Court have recently rocked the Great British Pound as a unanimous vote that the shutdown of parliament for a prolonged period of time by Prime Minister Boris Johnson was illegal. Putting Brexit decisions firmly up in the air again there now looks to be a push to put pressure on the PM to resign after only 8 weeks at the helm. GBP/USD moved from 1.2500 overnight to 1.2350 on open this morning.

A raft of United States data is due for release this evening including final GDP figures for the quarter. Attention then shift over to Europe where both ECB President Draghi and BOE Governor Carney are due to speak this evening at an annual conference in Frankfurt.

Expected Ranges

AUD/USD: 0.6720 - 0.6800 ▼

GBP/AUD: 1.8000 - 1.8400 ▼

AUD/NZD: 1.0700 - 1.0800 ▲

AUD/EUR: 0.6140 - 0.6200 ▼

AUD/CAD: 0.8900 - 0.8990 ▼