13th November 2020 - AUD/USD conforms to choppy US dollar conditions, hits fresh weekly lows


Good Morning,

Market Headlines

Sentiment sagged overnight, amid rising Covid cases, warnings from Fed Chair Powell, and further setbacks in US stimulus talks. The S&P500 is down 1.0%, and bond yields and risk sensitive currencies are lower. US 2yr treasury yields fell from 0.18% to 0.17%, while the 10yr yield fell from 0.94% to 0.89%. Australian 3yr government bond yields (futures) traded around 0.18%, while the 10yr yield fell from 0.93% to 0.89%. Commodities, Brent crude oil futures rose 0.7% to $44.10, copper rose 0.1%, iron ore fell 1.2% to $123.20, and gold rose 0.6%.

Currency

AUD/USD: 0.7224 – 0.7282

EUR/USD: 1.1759 – 1.1823

GBP/USD: 1.3108 – 1.3203

USD/JPY: 105.10 – 105.42

USD/CAD: 1.3059 – 1.3150

NZD/USD: 0.6844 – 0.6884

AUD/JPY: 75.94 – 76.69

AUD/NZD: 1.0563 – 1.0587

AUD Thoughts

AUD/USD came under pressure on its way to a low of 0.7224 overnight. Demand should slow this dip ahead of 0.7220 and again at 0.72c while offering interest still rests back toward 0.7340.

Event Risk Data Today

New Zealand: The October manufacturing PMI will be released, following four straight months in expansionary territory. Westpac expects the food price index to fall 0.4% in October, although annual price growth is currently running around 3%yr.

Euro Area: The September trade balance is due, and after finding a trough in April, the surplus has continued to widen. Following this, the 2nd estimate of Q3 GDP should confirm the 12.7% rebound from the advance reading.

US: With upstream price pressures still weak, the October PPI is expected to print at 0.2%. Finally, the November University of Michigan Consumer Sentiment Survey should hold around 82.0. The index has lagged the broader resurgence in activity.

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