USD Trading Outlook
The AUD had a strong bounce yesterday on the back of a number of factors; the lack of dovishness by the RBA, the budget impasse in the US causing a partial government shut-down, and strong support-on-dips from some big real-money funds. Chinese markets remain closed and that should ensure a quiet day although we do have Australian trade data on the economic calendar.
The budget impasse in the US looks increasingly likely to lead to at least a partial US government shutdown and this in turn has led to risk-aversion in the FX markets. The main movers have been USD/JPY and USD/CHF, with both pairs breaking lower. The EUR has also slipped this morning, with more political in Italy the cause. The AUD is definitely side-lined and we can expect more range trading whilst the opposing forces are at play. The HSBC version of China manufacturing PMI is the main event on the economic calendar.
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