AUD dips ahead of RBA interest rate decision
Monday 2 November, 2020
Daily Currency UpdateThe AUD slid further down on Friday against the USD, in a much similar fashion as it had throughout the week ahead of the RBA interest rate decision on Tuesday. There are expectations that the RBA will announce a second rate cut for 2020 lowering it to a record low 0.10% from 0.25%. We can also expect to see some further volatility with the US Presidential Election happening the day after.
From a technical standpoint, we can expect to see some resistance at the 0.7 support floor which the AUD/USD has not broken since late July this year. The AUD opened at 0.7029 against the USD this morning.
Key MoversCanadian GDP data came back higher than it’s expected forecast of 0.9%, showing that it grew 1.2% following a 3.1% increase in July. This is the fourth consecutive monthly increase since the steep drop in March and April which bodes well for the Canadian economy.
Over the weekend, the US Federal Reserve announced that they will lower the minimum loan level in their small business lending program from $250,000 to $100,000. Created to help small and medium sized businesses get through the COVID-19 pandemic, the reduction in loan size is an effort to broaden the appeal of the sparsely used facility.
It will be a big upcoming week for the USD with several key events coming up, the most prominent being the US Presidential Election on Wednesday. While there is no guess how the dollar and equity markets will react to either a Biden or Trump win, many traders are expecting further major volatility. We will also see US ISM Manufacturing PMI Data released on Tuesday and unemployment data after Friday midnight.
- AUD/CAD: 0.9220 - 0.9425 ▼
- AUD/EUR: 0.5910 - 0.6140 ▼
- GBP/AUD: 1.8020 - 1.8830 ▲
- AUD/NZD: 1.0490 - 1.0735 ▼
- AUD/USD: 0.6905 - 0.7155 ▼