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Currency Market Analysis

Nov 03, 2020 | Currency Market Analysis

Global Themes

USD eases as US shares jumps ahead of election

FX sentiment improved overnight.

The US’s Dow Jones index jumped higher, reclaiming some of last week’s 6.5% losses, ahead of tonight’s critical US election.

The USD drifted lower as markets shifted away from safe havens.

Euro weaker

The Japanese yen fell in line with other safe havens.

The euro was also weaker with rising cases of COVID-19 hitting markets.

The AUD was initially weaker before a large rally in US shares helped the AUD to recover.

RBA in focus

The Reserve Bank of Australia at 11.30am will be today’s major release.

The RBA is broadly expected to cut their cash rate from 0.25% to 0.10% and change their three-year bond yield target to 0.10%.

The key driver of any AUD moves will be around further quantitative easing. If the RBA moves to lower bond yields from five to ten years with a quantitative easing programme, the AUD could weaken.

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