The Aussie dollar is looking resilient, closing at a 3-week high

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The Australian dollar consolidated on gains achieved in Asia following the first US presidential debate in overnight trade.

It was a resilient performance, all things considered, coming despite the release of upbeat US economic data, continued concerns surrounding Deutsche Bank and weakness in commodity markets, particularly for crude oil.

“US Consumer Confidence figures rose to 104.1 – the highest level since mid-2007,” said Tapas Strickland, an economist at the National Australia Bank.

“It’s the second straight surprise from the measure and perhaps signals that the US consumer is not being affected by the US Presidential Elections.

“Importantly for the jobs market, the proportion of people believing jobs are ‘plentiful’ also rose to a nine-year high and runs counter to the softness coming from the ISM surveys,” he said.

Perhaps it was the strength in US stocks that helped to underpin the Aussie, rising steadily over the first half of trade after opening the session weaker.

In the end, the AUD/USD closed the session buying .7666, the highest closing level seen since September 7.

It is currently unchanged in early Asian trade on Wednesday.

AUD/USD 5-Minute Chart

After being dominated by the race to the White House over the past 24 hours, market attention today will switch to commentary from US Federal Reserve officials later in the session, including an appearance by Fed chair, Janet Yellen, before a House of Representatives panel on supervision and regulation this evening.

“Her views after the split FOMC we be closely noted to see how close the Fed is to raising rates in December,” says Strickland.

“FOMC voters Mester (hawk, dissenter), George (uber-hawk, dissenter), and Bullard also talk later tonight. Mester and George both dissented and as such there is likely to be a few hawkish headlines,” he notes.

Outside of Fed-speak, there is very little market-moving economic data to speak of, suggesting that movements in the USD/JPY — often influential on the broader US dollar index in Asia — will be influential on movements in the Aussie dollar today.

“Datawise there is not a lot of market sensitive releases apart from US Durable Goods Orders,” says Strickland.

“Other notable but not likely market sensitive data points include an RBA Speech by retiring Assistant Governor Edey, German GFK Consumer Confidence, and Draghi speaking to the European Parliament in a closed session.”

Edey will speak from 10.05am AEST at the Australian Financial Review Retail Summit in Melbourne.

Here’s the current Aussie dollar scoreboard as at 8am AEST.

  • AUD/USD 0.7666 , 0 , 0.00%
  • AUD/JPY 76.93 , -0.06 , -0.08%
  • AUD/CNH 5.1229 , -0.0001 , 0.00%
  • AUD/EUR 0.6834 , 0 , 0.00%
  • AUD/GBP 0.5887 , 0.0001 , 0.02%
  • AUD/NZD 1.0497 , -0.0001 , -0.01%

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