AUD pushes back through 0.71 ahead of Presidential Debate

Key Movers

The US dollar gave up recent gains through trade on Tuesday, drifting off near two-month highs as investors adjust position leading into the first debate in the race for the White House. Having enjoyed renewed demand through the last 2 weeks investors squared positions, capitalising on recent gains amid improvements in demand for risk. The two candidates are polar opposites pushing vastly different agenda’s and investors will be keenly attached to the prospects of both Biden and Trump. While investors sit back ahead of the debate improvements in broader market sentiment added further pressure on the world’s base currency. An uptick in domestic consumer confidence and a suggestion that a fiscal coronavirus aid package could be agreed by the end of the week helped fuel demand for risk, driving equities higher. The Dollar’s correlation with equity performance remains strong as sentiment continues to ebb and flow. With risk continuing to steer direction there is scope for added US upside leading into the election as shorts remain near decade highs.The Pound gave up gains hard won through trade on Monday, following commentary for Bank of England Governor Andrew Bailey. Bailey warned the recovery may wane as new restrictions rob the rebound of momentum, hinting that a move to negative interest rates was not off the table. Britain suffered the largest hit to GDP production of any major economy through Q2 and is expected to remain near 10% weaker through Q3. Having given up moves above 1.29 sterling fell to 1.2836 before edging higher into this morning's open.