US politics look set to move the Australian dollar today

Picture: Getty Images

The Australian dollar has pushed higher in early Asian trade on Monday, moving back above the US 76 cent level having closed at .7575 on Friday.

Some have put the move down to the reduced likelihood of Donald Trump presidency following the release of damaging recordings over the weekend.

That may be the case, but it must be remembered that volumes are wafer thin first thing on a Monday morning in Asia, especially with Japanese markets closed for a public holiday.

The AUD/USD currently buys .7607.

AUD/USD Hourly Chart. Source: Thomson Reuters

Looking ahead to Monday’s trading session, US politics will trump all other factors yet again today.

Ray Attrill, global co-head of FX strategy at the National Australia Bank, explains:

“The second Trump/Clinton debate takes place from 11:00am AEDT this morning and the polling impact of both that and Trump’s latest misogynistic audio revelations provide the early week focus,” says Attrill.

“Watch the Mexican peso for snap market judgement – both before and after the debate.

“The peso rallied quite hard out for the first debate, since when respected political forecaster Nate Silver’s www.fivethirtyeight.com had as of Saturday pushed the probability of Clinton winning up to 81.3% against 18.7% for Trump,” he says.

If the pattern of the first debate is repeated, a Clinton victory will likely support riskier assets, including the Aussie dollar.

“If there’s no reversal of Hillary’s lead – or indeed an extension of it after Monday, then by the end of the week it’s reasonable to think that a Clinton victory will be fairly fully priced into markets,” notes Attrill. “In the first instance, this will merely underpin confidence in a December Fed tightening.”

Outside of US politics, there’s no major data releases scheduled that appear likely to move the Aussie today.

Japanese markets will be closed for the Health and Sports Day holiday. US bond markets will also enjoy a long weekend for the Columbus Day holiday.

Chinese markets will return from the week-long Golden Week holiday.

There’s likely to be plenty of interest on the USD/CNY fixing from the PBOC at 12.15pm AEDT given moves in offshore traded yuan, or CNH, over the past week. This event could potentially move currency markets midway through the session, including for the Aussie.

Here’s the scorecard as at 7.50am AEDT.

  • AUD/USD 0.7607 , 0.0032 , 0.42%
  • AUD/JPY 78.59 , 0.62 , 0.80%
  • AUD/CNH 5.1003 , 0.0196 , 0.39%
  • AUD/EUR 0.6805 , 0.0043 , 0.64%
  • AUD/GBP 0.6134 , 0.0043 , 0.71%
  • AUD/NZD 1.0583 , -0.0008 , -0.08%

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