The Australian Dollar to US Dollar exchange rate has traded relativity flatly today as the US Dollar (USD) continues to suffer as a result of the political uncertainty surrounding the US elections.
Australian Dollar US Dollar (AUD USD) Strengthens as Clinton Faces Email Probe
The Australian Dollar (AUD) has struggled to advance against the US Dollar today despite the US Dollar notably dropping against many of the other majors.
Growing political uncertainty is behind the ‘Greenback’s’ recent weakness as Republican presidential candidate Donald Trump has caught up to Democratic rival Hillary Clinton in recent polls.
Trump was almost written off in early October as he dropped 16 points behind Clinton after a private recording of him boasting about sexually harassing women emerged.
However the recent announcement that the FBI would be opening a new enquiry into Mrs Clinton’s use of a private email server during her time as US Secretary of State has caused the gap in the polls to narrow to just two points.
With Trump being seen as an economic wildcard with little political experience the prospect of him becoming President has put the US Dollar in a tailspin against many of its peers.
But the high-yield Australian Dollar has been unable to profit from the Greenback’s weakness as this uncertainty has also diminished risk appetite in many traders as they wait for the election results before committing to risky investments.
US Dollar (USD) Drops as ISM Services Figures Disappoint
The US Dollar has also been hindered by lacklustre ISM service composite data today which saw figures drop to 54.8 in October, down from 57.1 the month before. This was significantly larger drop than expected as it was forecast to only slide to 56.0%.
The commodity-correlated Australian Dollar has its own problems however as iron ore prices finally appeared to slow earlier today, possibly bringing an end to the recent rally that caused prices to increase by 50% in 2016. Analysts predict that prices could drop from around $65 a tonne to as low as $40 a tonne as 2017 approaches and iron ore production begins to ramp up.
AUD USD Forecast: US Employment Data May Help US Dollar Rally
A predicted fall in US unemployment will likely see the AUD USD exchange rate drop tomorrow as the US Dollar rallies. The US unemployment rate is forecast to drop from 5.0% to 4.9% in October as Nonfarm payrolls rise to 175k, up from 156k the previous month. Conversely, an unexpected rise in unemployment could signal a further decline for the ‘Greenbank’.
The Australian Dollar will be hoping to gain some ground tomorrow when Australia releases its latest retail sale figures, however with sales expected to stagnate at 0.4% in September the report is unlikely to provide much momentum for the ‘Aussie’. However should the data show better than expected results then AUD USD may break out of its current stalemate.