AUD/USD to break below 0.70 ahead of US election – Westpac

AUD/USD has slided back to around 0.7050. Nerves are understandable ahead of next week’s massive risk events – Reserve Bank of Australia (RBA) and US election results on consecutive days. RBA easing steps should be priced but surely cap A$ rallies while further equity turbulence is likely into and in the wake of US Election Day but the aussie has potential to rebound on a Blue Wave outcome, per Westpac.

Key quotes

“For all the polling, there is plenty of scope for the US election to surprise and produce turbulence, with AUD probably the top risk proxy in the G10. So volatility seems assured even if we do get the market-preferred Blue Wave that would brighten the prospects for US fiscal support both short and medium-term. Such a prospect is one of the assumptions in our 0.75 year-end forecast.” 

“Q3 CPI was firmer than we expected but with the RBA placing greater emphasis on actual inflation, we are a long way from the 2-3%yr target – see across. The RBA’s rate cuts to 0.1% cash and 3 year are expected but uncertainty lingers over the shape of a new QE program.”

“Overall, we see risks of a break of 0.7000/10 support pre-election but scope for a sharp rebound if equities recover.”


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

GBP/USD tumbles from the highest since 2018 on the Brexit impasse

The GBP/USD roller coaster continues with a downfall below 1.35 after the pair hit a 31-month high of 1.3539 earlier. Brexit talks have yet to yield an agreement. Negotiations are set to continue through the weekend.


EUR/USD battles 1.2150 after disappointing NFP

EUR/USD is trading off the 32-month highs amid bumps in US stimulus and vaccine distribution. Markets await the all-important US Nonfarm Payrolls missed expectations with 245K jobs gained in November. 


XAU/USD fails to break $1850 and turns to the downside

Gold peaked after the beginning of the American session at $1848/oz reaching the highest level since November 23 and then turned to the downside. It bottomed at $1829 and is it about to end the week hovering around $1830.

Gold news

Dollar downfall explained and what's next for markets

The safe-haven US dollar is hitting multi-month and multi-year lows against its peers while stocks are on fire. What is behind the risk-on rally? Valeria Bednarik, Joseph Trevisani, and Yohay Elam discuss markets' moving parts as 2020 nears its end.

Read more

Extra week of Black Friday!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info