AUD LIKELY TO WEAKEN INTO OCTOBER 1 RBA MEETING
* USD is mixed; with the majors & gold outperforming and FX associated with the smaller open economies all underperforming.
* Today: PCE, Fed speeches & senate vote & government shutdown risk.
* CAD is soft in sympathy with AUD; but Gov Poloz unlikely to attempt to weaken it further and instead will focus on inflation mandate.
* EUR still trading in narrow post-FOMC range; Eurozone confidence improves; German CPI as expected; next week’s risk is ECB meeting.
* GBP is up—strong housing data & Carney says he does not support QE.
* JPY is up but within range as rising inflation could ease BoJ burden and finmin suggest a corporate tax cut still needs to be evaluated.
* AUD falls as rumours of an October 1st RBA rate cut circle; at a minimum RBA likely to focus on AUD gains and should weigh on FX.
* AUD trade idea: sell at 0.9310, target 0.9160, stop at 0.9420.
Read full report: FX Daily
Scotiabank