"While AUD/USD had been flirting with a possible test of the psychological 0.70 level, it appears that investors aren't quite ready to throw the kitchen sink when it comes to chasing the Aussie dollar lower," argue ING analysts.
Key quotes
"Arguably, a lot of bad news is already priced in - and on the margin, some stability in the CNY and whispers of US-China trade talks resuming are helping to provide support. What's not is probably the broader sell-off in global stock markets - which is likely to keep high-beta currencies like the AUD in check. While we're slightly surprised not to see a bigger initial move lower in AUD/USD on the back of a shaky few days in global markets - a more pronounced and sustained stock market rout would likely weigh on the AUD. On the flipside, China not being named a currency manipulator by the US Treasury and solid 3Q China GDP (Fri) could be small positives for the AUD."
"The domestic newsflow has been relatively quiet of late - although the week ahead does see the Sep jobs report (Thu) and Oct RBA meeting minutes (Tue). Markets will be looking for back-to-back solid employment growth (prior +40k) to corroborate the RBA's positive outlook on the labour market. The central bank's policy message has been pretty neutral - which is adequately priced into the AUD OIS curve - and Governor Lowe didn't give much away in his recent comments. Indeed, the most interesting headlines that crossed the wires was the RBA chief's endorsement of a strong US dollar - which probably didn't go down to well in the White House (if they were paying attention)."
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