The Australian and New Zealand Dollars finished lower last week as U.S. fiscal stimulus talks fell apart and demand for higher risk assets plunged ahead of Tuesday’s U.S. presidential election.
Volatility in the Forex market spiked higher and investors worried a resurgence in COVID-19 cases in the United States and Europe would derail the global economic recovery. Meanwhile, Aussie traders braced for a widely expected rate cut on November 3.
Last week, the AUD/USD settled at 0.7028, down 0.0108 or -1.52%;
While the NZD/USD closed at 0.6613, down 0.0078 or -1.17%.
What's Next?
The U.S. Dollar, risk appetite and the reaction to the widely expected the Reserve Bank of Australia (RBA) decisions will drive the price action this week. The direction of the greenback will probably carry more weight. Many support the theory that Joe Biden victory will likely put pressure on the dollar since his win should lead to more stimulus. If Trump wins, we could see a volatile response in the financial markets, which could make the U.S. Dollar an attractive safe-haven.
On Tuesday, the RBA is widely expected to ease monetary policy, given the commentary by central bank officials in recent weeks, particularly its governor Philip Lowe. Economists widely expect the RBA will cut the cash rate to 0.1% from the already record low of 0.25%, which has stood since March.
Read more from the original analysis: https://www.fxempire.com/forec...
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