Gridlock Rally Puts the Aussie Back on Its Feet
What’s New
- Democrats take both houses of Congress. Investors priced in gridlock, the Dow jumped more than 3% and US yields and the dollar eased.
- Oil tumbles. Brent dropped to around US$94, its lowest since early September, on bets the Iran war is winding down.
- Eurozone inflation runs hot. Headline CPI hit 4.0% against a 3.9% forecast, a three-year high that builds the case for an ECB hike in December.
Still in play: RBA peak talk and choppy AI sentiment keep a lid on how far the Aussie runs.
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Key Message: Washington gridlock, cheaper oil and a softer dollar have handed the Aussie back its RBA losses. Tonight’s BoE call and Friday’s US payrolls now decide whether the bounce sticks. |
AUD/USD
Overnight: AUD/USD finished higher, leading the G10 pack as the US dollar slipped.
A softer greenback after the Democratic sweep, plus a broad lift in stocks, carried AUD/USD back through 0.70 and erased Tuesday’s post-RBA slide. The dollar clawed back much of its early loss late in the US session, a reminder that Fed policy and data will soon reclaim the spotlight. Expect two-way trade into Friday’s payrolls, with a firm jobs print the main threat to the rebound. Technicals: 0.7000 now acts as first support, with the 0.6964 post-RBA low beneath it.
Currency Pair Directions
|
Pair |
Weekly Direction |
Range Bias |
|
AUD/USD |
â—„â–ş Neutral |
Steadier above 0.70 as the dollar softens. Friday’s payrolls are the test of whether the rebound has legs. |
|
AUD/EUR |
â–Ľ Lower |
Euro finds support. A 4.0% inflation print puts a December ECB hike firmly on the table. |
|
AUD/GBP |
â—„â–ş Neutral |
Hinges on tonight’s BoE vote. A firm 7-2 hike helps sterling; a one-and-done message would not. |
|
AUD/JPY |
â–˛ Higher |
Risk appetite is back. Rallying equities and lower oil reduce the pull of the safe-haven yen. |
|
AUD/NZD |
â–˛ Higher |
Kiwi on the back foot after NZ unemployment rose to a decade high of 5.7%. |
Data key: ▲ Higher  | ◄► Neutral  | ▼ Lower
Upcoming Data Releases This Week
|
Date |
Release |
Prior |
Forecast |
Impact |
|
Thu 5 Nov |
UK BoE Bank Rate decision / MPC votes to hike (MPR and press conference) |
3.75% |
4.00% |
High |
|
Sat 7 Nov |
US Nonfarm Payrolls / Unemployment Rate / Avg Hourly Earnings m/m |
29K |
63K |
High |
