Currency Update: AUD hits 0.9600, on the back of the USD reacting negatively to the news

Bell Potter
Bell Potter Stockbroker

Currency Update: AUD hits 0.9600, on the back of the USD reacting negatively to the news. If the upward trend continues, the RBA may have to re-think its on-hold strategy, especially if investment and employment intentions remain weak, as reported in yesterday's NAB Q3 Business Survey. Despite a US deal being done and a crisis averted (for now), investors are now wondering whether to expect another government shutdown and another round of deadline-day deals early next year. A later start to Fed tapering now looks likely. The USD index has lost just over 1%, with the major currencies notching up gains of 0.4% (CAD) to 1.3% (GBP). Further highlighting the push-back in tapering expectations, 10-year US bond yields lost a full 7bps overnight (to 2.59%) to be 16bps below yesterday's 2.75%. Today's Forecast Range USD 0.9580 - 0.9680

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