Major bets sidelined as all attentions shift to US presidential debate and inflation update
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Daily Currency Update
The Australian dollar tracked a very narrow range through trade on Tuesday and is virtually unchanged this morning. Markets seem content in sidelining major bets ahead of today's major risk events, US CPI numbers and the Trump vs. Harris Presidential debate. While holding above US$0.66 the AUD remains vulnerable to further fluctuations in the risk narrative as the outlook for key commodities is somewhat clouded. Iron ore prices fell another 1.25% overnight while copper gave up nine-tenths of a percent as industrial metals suffered another day traders would rather forget. China trade data for August was mixed as weak domestic demand and ongoing concerns for China’s beleaguered property market continue to weigh on commodity prices while acting as a headwind pushing against risk on moves.Our focus today sits on the US Presidential Debate and US CPI numbers. With the election under 2 months away, this will likely be the only debate between the candidates and will be crucial in shaping expectations for the Oval Office.
Key Movers
Price action was muted through trade on Tuesday as the USD tracked within a narrow range when measured against a basket of major peers while most G10 currencies offered little to excite investors. Investors seemed content in sidelining major bets ahead of today's all-important US presidential debate and tonight’s US CPI inflation update. With the Fed’s focus shifting to the labour market we expect the market reaction to CPI number to be muted when compared to the data points influence over recent years, however, a surprise miss could see investors scrambling to adjust positions ahead of next week's Fed policy meeting. Instead, our attention will likely be glued to the first Trump vs. Harris debate. With such conflicting agendas at stake, there is ample room for volatility across financial markets as analysts adjust bets on who will take the Oval Office come November.Note: The CAD underperformed on the day after the Canadian Government declared it would begin implementing Tariffs on Chinese Electric Vehicles while announcing a consultation period with the prospect of extending tariffs to include batteries, battery parts semiconductors, solar products and critical minerals.
Expected Ranges
- AUD/USD: 0.6550 - 0.6780 ▼
- AUD/EUR: 0.5980 - 0.6120 ▲
- GBP/AUD: 1.9500 - 1.9700 ▲
- AUD/NZD: 1.0800 - 1.0900 ▼
- AUD/CAD: 0.9000 - 0.9100 ▲