AUD struggles to break 0.73 as markets consolidate gains
Tuesday 10 November, 2020
Daily Currency UpdateAUD - Australian DollarThe Australian dollar upturn stalled through trade on Tuesday as investors consolidated gains, muting moves across currency markets. The AUD maintained a narrow 40 point trading band, bouncing between support at 0.7255 and resistance at 0.7295 as the positive risk narrative was overshadowed by ongoing Trump campaign claims of voting irregularities and fraud. While markets are largely working on the basis that the Democrat’s won the Election and Joseph R Biden will be the 46th President of the United States there are concerns Trump will enact a series of brash and vindictive domestic and foreign policy decisions through the next 10 weeks in a bid to obstruct a smooth transition of power.With little of note on today’s macroeconomic docket attentions remain squarely affixed to the evolving risk narrative. With the US, France, the UK and Canada all observing a Remembrance Day holiday, volumes will be thin opening the door to greater price action and fluctuation. We expect resistance on moves above 0.73 and approaching 0.74 with support at 0.7230 and 0.7180 intact.
Key MoversThe US dollar is generally weaker when measured against a basket of major currency counterparts while the Great British Pound outperformed tracking higher against the dollar and the Euro as investors chased gains amid hopes a COVID-19 vaccine will revive the embattled British economy, while comments from key UK negotiators suggest a trade deal with the EU was imminent. With Brexit talks stagnant for so long the suggestion a post Brexit trade deal will be reached is a huge relief for markets and a catalyst that will likely push Sterling higher into the end of the year. Having pushed through 1.3250 to touch two-month highs at 1.3278 the GBP has retreated into this morning's open and currently sits at 1.3248.Attentions today remain with the US election wash up, COVID-19 updates and Brexit trade talks. Investors are keen to continue driving the resurgent risk narrative opening the door to further USD weakness through the days and weeks ahead.
- AUD/USD: 0.7180 - 0.7340 ▼
- AUD/EUR: 0.6080 - 0.6180 ▼
- GBP/AUD: 1.7920 - 1.8420 ▲
- AUD/NZD: 1.0580 - 1.0720 ▼
- AUD/CAD: 0.9380 - 0.9520 ▲