The Australian dollar is back above 76 cents as crude oil prices surge

Photo by Michael Dodge/Getty Images

The Australian dollar popped higher in overnight trade, sitting above the US 76 cent level for much of the US session.

Impressively, the lift in the Aussie came despite US dollar strength — something some analysts put down to the outcome of the second US presidential debate — seemingly taking its cues from a lift in commodity prices and stocks that was driven by another surge in crude oil.

“AUD/USD climbed back above 0.7600 and rallied against the major cross rates, as oil and other industrial commodity prices lifted,” said Richard Grace, chief currency strategist at the Commonwealth Bank, in his morning note.

In the end, the AUD/USD finished the session buying .7606, up 0.41% from Friday’s closing level.

AUD/USD 5-Minute Chart

Looking to the day ahead, there’s a plethora of domestic data releases scheduled, although none standout as a potential driver of the Aussie over the session.

The monthly NAB business survey for September will be released at 11.30am AEDT, along with housing finance data for August from the ABS.

“In August, the business confidence reading rose slightly to +6 while business conditions eased two points to a still above-average print of +7. So although in August we saw some moderation in business conditions overall the survey still painted a reasonable upbeat picture,” said Rodrigo Catril, currency strategist at the NAB.

“That said, looking at the business condition components in August (trading, profitability and employment conditions), conditions in trading and profitability continued to ease from previously very high levels and it will be interesting to see if this trend is still evident in September.”

As for the housing finance release from the ABS, there’s likely to be some interest in the composition of lending growth, particularly to housing investors. After plummeting in the first half of the year, lending to this component has accelerated in recent months, corresponding with a pickup in house prices in Sydney and Melbourne, favourite destinations for investors.

The latest weekly ANZ-Roy Morgan consumer confidence report will also be released at 9.30am AEST.

Outside of domestic data releases, Charles Evans, Chicago Fed President will speak on the US economy and policy at a lunch event held in Sydney.

The Australian Office of Financial Management (AOFM) is also scheduled to launch a 30-year Australian government bond tender for the first time with the size and pricing as yet unknown. This could potentially shift the Australian rates curve, and, as a consequence, be influential on movements in the Aussie.

Later in the session, markets will also receive the latest NFIB small business optimism index from the US along with the Fed’s labour market conditions index, both for September.

There’s also a smattering of data releases scheduled in Europe, although none appear likely to move the Aussie.

Here’s the latest scorecard as at 8.10am AEDT.

  • AUD/USD 0.7607 , 0.0001 , 0.01%
  • AUD/JPY 78.81 , 0.03 , 0.04%
  • AUD/CNH 5.1079 , 0.0001 , 0.00%
  • AUD/EUR 0.6827 , -0.0001 , -0.01%
  • AUD/GBP 0.6151 , 0.0001 , 0.02%
  • AUD/NZD 1.0654 , 0 , 0.00%

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