Daily Currency Update

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Demand swings with debate

USD - United States Dollar

Demand for the US dollar has been about as rough as the first US presidential debate, with the currency swinging up and down like candidates' barbs against one another.

Just after the conclusion of the debate, demand for the dollar decreased and it was up and down against major currencies through trading overnight. Demand picked up this morning after a host of economic indicators beat forecasted expectations.
Private sector employment increased by 749,000 jobs from August to September, according to the September ADP National Report. This early look at employment is usually two days ahead of employment data. These jobs numbers bolstered existing homes sales, which increased 8.8% over the prior month.

The Chicago Business Barometer jumped to its highest level since December 2018. The barometer measures how businesses react to market conditions as perceived by their purchasing managers.

Despite the positive numbers, the US Bureau of Economic Analysis released its gross domestic product figures for the quarter. Not surprisingly, GDP decreased at an annual rate of 31.4%.

Key Movers

Majority of investors are fixated on the final stage of Brexit discussions, which restarted yesterday. There are still several areas of disagreement. According to the latest headlines, Brussels rebuffed new UK proposals on state subsidies. Tomorrow morning sees the release of UK Manufacturing PMI, which could likely leave the market unchanged, despite the figure posted.

The 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 capitalized 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. This drove equities higher and dragged the AUD to intraday highs of 0.7140.

Expected Ranges

EUR/USD: 1.168 - 1.175 ▼

GBP/USD: 1.281 - 1.293 ▼

AUD/USD: 0.710 - 0.716 ▼

USD/CAD: 1.332 - 1.341 ▼