US presidential race polls hurt $A

Trevor Chappell

(Australian Associated Press)

The Australian dollar is lower against the US dollar as a narrowing in the polls on next week’s US presidential elections send jitters through global markets.

At 1700 AEDT on Wednesday, the local unit was trading at 76.31 US cents, down from 76.54 US cents on Tuesday.

Westpac senior currency specialist Sean Callow says markets have reacted negatively to polls suggesting Republican Party candidate Donald Trump still has a chance of beating Democrat Hillary Clinton in the November 8 election.

The Australian dollar had rallied after the Reserve Bank of Australia left the cash rate on hold on Tuesday, but then “rolled over”, he said.

“While commodity prices for the most part are still supportive of the Aussie, for now the market’s attention is very firmly on the tightening race for the White House and what that might mean for regional trade, equity market sentiment, etcetera,” Mr Callow said.

“And when markets are nervous and equities are falling globally, then the Aussie tends to perform poorly – it is a very risk sensitive currency.”

Aside from the US presidential race, markets are waiting on the conclusion of a US Federal Reserve two day meeting. The Fed is expected to keep US interest rates unchanged, but markets expect the Fed is likely to set the stage for a December rise.

CURRENCY SNAPSHOT AT 1700 AEDT ON WEDNESDAY

One Australian dollar buys:

* 76.31 US cents, from 76.54 cents on Tuesday

* 79.23 Japanese yen, from 80.24 yen

* 68.95 euro cents, from 69.80 euro cents

* 62.29 British pence, from 62.58 British pence

* 105.59 New Zealand cents, from 106.90 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEDT was $US1,291.30 per fine ounce, up $US11.70 from $US1,279.60 on Tuesday.

BOND SNAPSHOT:

* CGS 5.25pct March 2019, 1.6745pct, down from 1.6803pct on Tuesday

* CGS 4.25pct April 2026, 2.2949pct, down from 2.3013pct

Sydney Futures Exchange prices:

* December 2016 10-year bond futures contract at 97.68 (implying a yield of 2.32 per cent), up from 97.64 (2.36 per cent) on Tuesday.

* December 2016 3-year bond futures contract at 98.31 (1.69 per cent), up from 98.28 (1.72 per cent).

(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)

Source: IRESS

 

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