8th October 2020 - AUD/USD regained some lost ground and settled around 0.7135 in late trade


Good Morning,

Market Headlines

The US dollar gave back part of its Tuesday’s gains this Wednesday, as Trump changed his twitter’s rhetoric, announcing the end of negotiation with Democrats. The Fed minutes noted that some Fed officials saw the need to “further assesshow bond buying “could best support” the economy and also that "most forecasters were assuming that an additional pandemic-related fiscal package would be approved this year, and noted that, absent a new package, growth could decelerate at a faster-than-expected pace in the fourth quarter.”

EU/UK talks appear to be making progress but at a slow pace which will likely extend the negotiations beyond the EC Summit on 15th-16th Oct.

Wall St was near its highs in late trade with the Dow +2.0% at 28328, S&P +1.9% at 3424, NASDAQ +2.0% at 11362.

Commodities: Crude oil dropped with rising US supplies and European lockdown fears hitting prices (Nov WTI USD40.03/bbl, Dec Brent USD42.10/bbl) though prices regained some ground into the close on improved risk sentiment in equities. Gold traded in a relatively tight range, settling of its lows but below USD1900/oz (-0.5% lower on the day) at USD1885/oz.

Currency

AUD/USD: 0.7121 – 0.7151

EUR/USD: 1.1735 – 1.1782

GBP/USD: 1.2845 – 1.2929

USD/JPY: 105.72 – 106.11

USD/CAD: 1.3261 – 1.3309

NZD/USD: 0.6583 – 0.6600

AUD/JPY: 75.30 – 75.75

AUD/NZD: 1.0809 – 1.0850

AUD Thoughts

AUD/USD retraced some of its lost ground settling around 0.7135 in late trading session. Further demand is expected toward the lows of 0.7095 and again ahead of 0.70c while offering interest likely remains thick ahead of 0.7200.

Event Risk Data Today

New Zealand: ANZ Business confidence is expected to pick up in the October survey, but will remain below pre-Covid levels (prior -28.5).

China: The service PMIs have settled in expansionary territory. New orders continue to rise as overseas demand picks up (prior: 54.0, market f/c: 54.3).

Euro Area: The September meeting minutes will be released, providing further insight into the ECB’s growth and inflation outlook.

US: Initial jobless claims are expected to skew lower for a second consecutive week. Continuing claims are falling faster than initial claims as more unemployed Americans exhaust the benefits available (prior: 837k, market f/c: 820k).

US: The US Vice Presidential Debate (12:00 AEST) between Mike Pence and Kamala Harris will take place in Utah

US: The FOMC’s Rosengren (03:10 AEDT) and Bostic (05:00 AEDT) will also speak.

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