Home Daily Commentaries AUD pushes back through 0.71 ahead of Presidential Debate

AUD pushes back through 0.71 ahead of Presidential Debate

Daily Currency Update

AUD - Australian DollarThe Australian dollar crept higher through trade on Tuesday, extending back through 0.71 US cents. Having maintained a narrow trading bound throughout the domestic session the AUD broke resistance at 0.7090 as investors capitalised on recent US gains and squared positions leading into the first Presidential debate. The AUD found added support in improved market sentiment as an uptick in US consumer confidence numbers helped bolster investors' demand for risk driving equities higher and dragging the AUD to intraday highs of 0.7140.Attentions remain squarely affixed to risk and the upcoming Presidential debate in shaping short term direction. With so much political uncertainty and two candidates spruiking vastly different economic and political agenda’s the outcome of this election will shape investors' risk profile. Having bounced off supports at 0.7030 we expect the AUD will continue to trade between last week’s low and highs approaching 0.72/0.7250 leading into next week's RBA policy announcement.

Key Movers

The US dollar gave up recent gains through trade on Tuesday, drifting off near two-month highs as investors adjust position leading into the first debate in the race for the White House. Having enjoyed renewed demand through the last 2 weeks investors squared positions, capitalising on recent gains amid improvements in demand for risk. The two candidates are polar opposites pushing vastly different agenda’s and investors will be keenly attached to the prospects of both Biden and Trump. While investors sit back ahead of the debate improvements in broader market sentiment added further pressure on the world’s base currency. An uptick in domestic consumer confidence and a suggestion that a fiscal coronavirus aid package could be agreed by the end of the week helped fuel demand for risk, driving equities higher. The Dollar’s correlation with equity performance remains strong as sentiment continues to ebb and flow. With risk continuing to steer direction there is scope for added US upside leading into the election as shorts remain near decade highs.The Pound gave up gains hard won through trade on Monday, following commentary for Bank of England Governor Andrew Bailey. Bailey warned the recovery may wane as new restrictions rob the rebound of momentum, hinting that a move to negative interest rates was not off the table. Britain suffered the largest hit to GDP production of any major economy through Q2 and is expected to remain near 10% weaker through Q3. Having given up moves above 1.29 sterling fell to 1.2836 before edging higher into this morning's open.

Expected Ranges

  • AUD/USD: 0.7030 - 0.7230 ▲
  • AUD/EUR: 0.6010 - 0.6090 ▲
  • GBP/AUD: 1.7880 - 1.8220 ▼
  • AUD/NZD: 1.0750 - 1.0850 ▲
  • AUD/CAD: 0.9450 - 0.9590 ▲