The AUD/USD opens at 0.7276 and the NZD/USD opens at 0.6780.
November 9, 2020 — 2 min read
It’s not every election that you get to compare victory speeches, but 2020 keeps on delivering. Biden’s was the one that counted though, winning the US Election. Trump has vowed to challenge it, however it’s not clear how serious he is, or if he is just saying it so as to not to have to admit defeat. From the markets point of view, it remains a risk, but generally the markets have responded well to a Biden victory, with risk trading well. The AUD got right up to 0.7300, while the NZD hit 0.6800, but could not quite manage to break through that significant level.
Elections aside, we had a range of US data out early Saturday morning, which was actually quite positive. Unemployment came in a lot lower than expected at 6.9%. Remember this compares to 14.7% back in May, so the bounce back so far has been a lot stronger than expected.
Closer to home we have the RBNZ out on Wednesday. They have flagged that they will not be touching interest rates until next year, but as ever, any hints to a change in that view will be closely scrutinised. The RBNZ would be very worried about financial stability if the housing market collapsed, hence why they are so keen to be supportive of the market and keep interest rates low. However, with house prices starting to boom again, and the economy not hit as hard as initially feared, we don't believe there is a need to risk going negative. With the market already pricing in negative rates, any language about them being happy with the outlook may catch the market off-balance, and if 0.6800 breaks and we could well get a sharp move higher.