The Australian dollar is drifting as markets wait for bigger events ahead

Photo: Tom Shaw/Getty Images.

The Australian dollar did very little overnight, rising fractionally in Europe before reversing that move in North American trade.

The reversal of fortune was yet again due to a lift in US bond yields, underpinning yet another rally in the US dollar.

“The positive start to the US equity market and better than expected US data releases has seen the USD perform against all G10 currencies,” said Rodrigo Catril, currency strategist at the NAB.

“These factors also contributed to a steeping in the US Treasury curve with the move led by longer dated bonds.”

After hitting a high of .7641 earlier in the session, the AUD/USD topped out and eventually reversed following the release of a strong US manufacturing PMI for October.

It currently buys .7609.

AUD/USD 5-Minute Chart

As was the case on Monday, there is nothing on the domestic or regional economic events calendar on Tuesday that looks set to move the Aussie in one direction or another.

Given the focus on the Chinese yuan at present — offshore traded yuan, or CNH, fell to the weakest level on record against the US dollar overnight — it’s likely that movements in the USD/CNH will be influential on the Aussie dollar today.

It certainly was on Monday with the AUD/USD seemingly doing the exact opposite to USD/CNH for much of the Asian session.

Later in the session, there’s a raft of US economic data to digest, although none that looks set to trouble the scorers, says Catril.

“For choice, however, the Conference Board Consumer Confidence reading should be worth a look,” he says.

“Hurricane Matthews early in the month had a big impact in economic activity and as a result a dampening effect in consumer confidence is also expected.

“The Richmond manufacturing index is also due out along with FHFA and S&P Corelogic house price indices.”

Here’s the Aussie dollar scoreboard at 7.45am AEDT:

  • AUD/USD 0.7609 , 0.0006 , 0.08%
  • AUD/JPY 79.29 , 0.48 , 0.61%
  • AUD/CNH 5.1592 , 0.0174 , 0.34%
  • AUD/EUR 0.6995 , 0.0019 , 0.27%
  • AUD/GBP 0.6217 , 0.0013 , 0.21%
  • AUD/NZD 1.0651 , 0.0052 , 0.49%

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