- The Australian dollar fell as traders grew cautious ahead of the US presidential election results.
- The Australian dollar could regain momentum after RBA Governor Michelle Bullock reaffirmed her hawkish stance on Tuesday.
- Exit polls in Georgia give Mr. Trump a 10% lead over Ms. Harris, based on less than 1% of votes counted.
The Australian dollar (AUD) regained recent gains against the US dollar (USD) on Wednesday as market expectations rose ahead of the results of the US presidential election. The AUD/USD pair has fallen as the US dollar (USD) has strengthened as confidence in Trump's trade has increased following the favorable outcome for Republican candidate Donald Trump in the US presidential election.
Polling data shows a close race between Donald Trump and Kamala Harris, with Trump currently in the lead. Mr. Trump has a large lead over Ms. Harris in the polls, 57% to 43%, but the difference is slightly larger in the polls, with Mr. Trump at 60.7% and Ms. Harris at 39.5%. These numbers reflect growing support for Trump as Election Day approaches, but the race remains competitive.
The market is expecting a 25 basis point (bp) rate cut, and all eyes will be on the US Federal Reserve's decision on interest rates on Thursday. The CME FedWatch tool currently has a 96.4% chance that the Fed will cut rates by a quarter of a percentage point at its November meeting, reflecting strong market consensus for a modest rate cut this week.
The Australian dollar rose after the Reserve Bank of Australia (RBA) decided to keep the Official Cash Rate (OCR) unchanged at 4.35% on Tuesday, marking its eighth consecutive pause. RBA Governor Michelle Bullock reiterated her hawkish stance, stressing the need for restrained monetary policy given persistent inflation risks and a strong labor market.
Additionally, Australia's latest Purchasing Managers' Index (PMI) data showed positive changes in private sector activity in October. Growth in the services sector offset continued declines in manufacturing.
Daily Digest Market movers: Australian dollar falls amid market caution ahead of US election results
- Early exit polls in Wisconsin showed Republican candidate Donald Trump leading with 56% of the vote, compared to 42.5% based on a projected 7.5% vote count. In North Carolina, exit polls show a close race between Trump and Kamala Harris, with 50% of the votes counted. In Michigan, with 12% of votes counted, Harris' lead narrowed from 61% to 53%.
- Georgia is one of the early states with exit polls available, showing a tilt toward Republican presidential candidate Donald Trump. As The Washington Post reported, this estimate is based on less than 1% of the total votes counted, but with 16 electoral votes, initial data shows Trump facing Democratic candidate Kamala Harris. It is suggested that they have a lead of about 10%. This early lead suggests Mr. Trump's momentum, but the final outcome in Georgia remains uncertain as only a small portion of the votes have been counted.
- Preliminary Pennsylvania exit polls show Harris in the lead, according to CBC News. After about 8% of the expected votes were counted, Mr. Camara secured a 71% majority. There are 19 electors at stake in the state.
- The US ISM Services Purchasing Managers Index for October was 56.0, up from 54.9 in September and above expectations of 53.8. In contrast, the S&P Global Services PMI for October was 55.0, slightly below the pre-measured reading and forecast of 55.3.
- The Australian Judo Bank Services PMI for October was 51.0, an improvement from the previous 50.6 and above the market consensus of 50.6. Composite PMI rose to 50.2 in October, but previously it was 49.8. Caixin China Services PMI also rose to 52.0 in October from 50.3 in September.
- The TD-MI inflation gauge rose 0.3% month-on-month in October, up from a 0.1% rise the previous month and the highest reading since July, ahead of the RBA's November policy meeting. Annually, the gauge rose 3.0% compared to 2.6% previously.
- ANZ Australian job advertisements increased by 0.3% month-on-month in October, a marked slowdown from September's upwardly revised 2.3% increase. Although the growth slowed, it was the second consecutive month of increase.
- Chinese Commerce Minister Wang Wentao met with Australian Trade Minister Don Farrell on Sunday. China expressed hope that Australia will continue to strengthen the business environment and ensure fair and equal treatment of Chinese companies.
Technical analysis: Australian dollar remains below 0.6600, 9-day EMA
The AUD/USD pair was trading around 0.6590 on Wednesday, with technical indicators on the daily chart suggesting the bearish trend could continue. The pair has fallen below the 9-day and 14-day exponential moving averages (EMAs), indicating downside momentum. Moreover, the 14-day Relative Strength Index (RSI) remains below the 50 threshold, further supporting the bearish outlook for the currency pair.
Immediate support for AUD/USD lies near the three-month low of 0.6536. Below this level, the pair could head towards 0.6500, which provides important psychological support.
On the upside, the pair faces resistance at the 9-day EMA at 0.6603 and may face additional resistance at the 14-day EMA at 0.6620. A break above these levels could indicate strengthening momentum and could target the key psychological level at 0.6700.
AUD/USD: daily chart
Australian dollar price today
The table below shows today's percentage change in the Australian Dollar (AUD) against major listed currencies. The Australian dollar was the weakest against the US dollar.
| USD | EUR | GBP | JPY | CAD | australian dollar | new zealand dollar | swiss franc | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.59% | 1.03% | 1.38% | 0.55% | 1.30% | 0.96% | 1.07% | |
| EUR | -1.59% | -0.56% | -0.20% | -1.03% | -0.30% | -0.63% | -0.51% | |
| GBP | -1.03% | 0.56% | 0.34% | -0.47% | 0.26% | -0.08% | 0.04% | |
| JPY | -1.38% | 0.20% | -0.34% | -0.83% | -0.09% | -0.45% | -0.32% | |
| CAD | -0.55% | 1.03% | 0.47% | 0.83% | 0.74% | 0.40% | 0.51% | |
| australian dollar | -1.30% | 0.30% | -0.26% | 0.09% | -0.74% | -0.34% | -0.22% | |
| new zealand dollar | -0.96% | 0.63% | 0.08% | 0.45% | -0.40% | 0.34% | 0.10% | |
| swiss franc | -1.07% | 0.51% | -0.04% | 0.32% | -0.51% | 0.22% | -0.10% |
The heat map shows the percentage change between major currencies. The base currency is selected from the left column and the quote currency is selected from the top row. For example, if you select Australian Dollars from the left column and move along the horizontal line to US Dollars, the percentage change displayed in the box represents AUD (Basic)/USD (Quote).
Australian Dollar Frequently Asked Questions
One of the most important factors for the Australian dollar (AUD) is the interest rate level set by the Reserve Bank of Australia (RBA). Australia is a resource-rich country, so another important factor is the price of its largest export, iron ore, which is Australia's largest trading partner, as well as its inflation, growth rate and trade. The health of China's economy is also a factor. balance. Market sentiment is also a factor, with investors taking on riskier assets (risk-on) or seeking safer assets (risk-off), with risk-on being positive for the Australian dollar.
The Reserve Bank of Australia (RBA) influences the Australian dollar (AUD) by setting the level of interest rates at which Australian banks can lend to each other. This affects the level of interest rates throughout the economy. The RBA's main goal is to maintain a stable inflation rate of 2-3% by adjusting interest rates up and down. The Australian dollar is supported by relatively high interest rates compared to other major central banks, and conversely by relatively low interest rates. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former being AUD-negative and the latter AUD-positive.
China is Australia's largest trading partner, so the health of the Chinese economy has a significant impact on the value of the Australian dollar (AUD). When China's economy does well, China buys more raw materials, goods and services from Australia, increasing demand for the Australian dollar and boosting its value. The opposite is true if China's economy is not growing as fast as expected. Therefore, positive or negative surprises in China's growth data often directly impact the Australian dollar and its pairs.
Iron ore is Australia's largest export, accounting for $118 billion annually, according to 2021 data, with China the main destination. Therefore, iron ore prices could be a driver for the Australian dollar. Generally, when the price of iron ore increases, the Australian dollar also appreciates because aggregate demand for the currency increases. The opposite is true if the price of iron ore falls. Higher iron ore prices tend to increase the likelihood of Australia's trade balance being positive, which is also positive for the Australian dollar.
The balance of trade is the difference between what a country earns from exports and what it pays for imports, and is another factor that can affect the value of the Australian dollar. If Australia produces a highly sought-after export, the country's currency will be deducted from just the surplus demand generated from foreign buyers seeking to buy that export, compared to the amount spent on purchasing the import. value increases. Therefore, a positive net trade balance will cause the Australian dollar to appreciate, while a negative trade balance will have the opposite effect.
