Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Australia, NZ dlrs off lows in light trade, US elections eyed

Published 10/10/2016, 12:40 pm
Updated 10/10/2016, 12:50 pm
© Reuters.  Australia, NZ dlrs off lows in light trade, US elections eyed
AUD/USD
-
NZD/USD
-
AU10YT=RR
-

By Cecile Lefort and Charlotte Greenfield

SYDNEY/WELLINGTON, Oct 10 (Reuters) - The Australian and New Zealand dollars had a firm tone on Monday as investors awaited the outcome of a U.S. presidential debate, with markets having increased the probability of a victory by Democratic candidate Hillary Clinton.

The Australian dollar AUD=D4 hovered around 76 cents, having bounced from a two-week low of $0.7553 on Friday. Resistance was found at a double-top of $0.7624. Support was found at the 61.8 retracement of the $0.7443/$0.7711 move at $0.7545.

Trading was subdued due to a public holiday in Japan, while Chinese markets reopened after being shut for a week-long national break.

All eyes are on the U.S. elections with presidential betting markets putting the probability of a Clinton win at more than 80 percent.

"If Donald Trump outperforms, there would be a greater chance of Trump winning the elections and the U.S. dollar would rise against most major currencies," said Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia.

"It's because his economic policies are inflationary and would force the Federal Reserve to increase interest rates at a faster pace than it would otherwise."

Haddad forecasts slightly firmer Aussie and kiwi dollars should Clinton outperform.

Sterling slipped to A$1.6361 GBPAUD=D4 , having dropped as far as A$1.5582 on Friday. It shed 3 percent last week, the biggest fall since July with dealers forecasting more volatility amid concerns about a "hard" Brexit.

Likewise, it stood at NZ$1.7353 GBPNZD=R against the kiwi, from NZ$1.6507 touched in the last session.

The pound is down around 20 percent against the Antipodean currencies so far this year.

The New Zealand dollar NZD=D4 rose slightly on Monday, continuing its gains since Friday when softer-than-expected U.S. employment data weighed on the greenback.

The New Zealand currency was trading at $0.7166 by lunchtime Monday, up from $0.7110 on Friday.

"A lack of data and a US holiday should keep ranges tight over the coming day," said BNZ currency strategist Jason Wong, in a research note.

New Zealand government bonds 0#NZTSY= gained, sending yields 1 basis points lower at the short end of the curve.

Australian government bond futures had a soft tone, with the three-year bond contract YTTc1 off 1 tick at 98.390. The 10-year contract YTCc1 was down half a tick at 98.8550 having touched its lowest since late June. The 20-year contract YXXc1 was half a tick higher at 97.2600.

The spread between local 10-year AU10YT=RR and 3-year AU10YT=RR bonds stood at 52 basis points, from 39 basis points late September, reflecting expectations of a steady interest rate until early next year. (Editing by Richard Borsuk)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.