AUD/USD and NZD/USD Fundamental Daily Forecast – Little Reaction to Debate, Improving China Manufacturing Data

The Australian and New Zealand Dollars are edging lower on Wednesday as lower appetite for riskier assets drove investors into the safety of the U.S. Dollar. The greenback rose against the higher-risk Aussie and Kiwi as traders assessed a fierce first debate between Republican President Donald Trump and Democratic rival Joe Biden ahead of the November 3 U.S. presidential election.

At 10:47 GMT, the AUD/USD is trading .7127, down 0.0004 or -0.05% and the NZD/USD is at .6586, down 0.0006 or -0.09%.

In the pivotal debate, marked by Trump’s repeated interruptions in a chaotic encounter, the candidates battled over the president’s leadership on the coronavirus pandemic, the economy and taxes, Reuters said.

Neither candidate emerged from the debate with a decisive advantage. With both candidates insulting each other, there was not much impact on the markets.

Meanwhile, month-and-quarter-end currency flows appeared to hamper the greenback, while better-than-expected U.S. economic data also dented its perceived safe-haven bid the first two days of the week.

The Aussie and Kiwi were also underpinned after twin surveys in China showed strong factory activity growth, which backed recent signs of a rebound in broad sectors of the world’s second-biggest economy.

In China, the Manufacturing PMI came in at 51.8, higher than the 51.3 estimate and 51.0 previous reading. The Non-Manufacturing PMI was 55.9, above the 54.6 forecast and 55.2 previous reading. The Caixin Manufacturing PMI came in at 53.0, slightly below the forecast.

In Australia, Building Approvals fell 1.6%, well below the previously reported 12.2% gain. Private Sector Credit was flat.

Early in the session, the Kiwi rose modestly after an ANZ Bank survey showed New Zealand business sentiment improved in September amid growing confidence that the country’s coronavirus outbreak is under control.

Daily Forecast

U.S. reports will move to the forefront on Wednesday with investors getting the opportunity to react to figures on Housing Starts, Final GDP, Chicago PMI and Pending Home Sales. Look for a volatile reaction to the ADP Non-Farm Employment Change report. It is expected to come in at 650K, better than last month’s 428K, a sign of improving private sector hirings.

Traders are still monitoring the progress between the Democrats and Republicans over the next stimulus package. However, the price action suggests traders are putting little faith in having a deal completed before the November 3 elections.

For a look at all of today’s economic events, check out our economic calendar.