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Wednesday Brings Sharp Losses In AUD/USD

AUSSIE

AUD/USD tumbled on Wednesday, after Westpac said that they now expect the RBA to cut interest rates in October, while a lingering concern over the resurgence of coronavirus in various places across the world and a sell-off at Wall Street generated risk-off flows that further dented the Aussie. The rate fell off the $0.71 handle and showed at its worst levels since July.

  • Treasurer Frydenberg gave a round of morning interviews ahead of a speech to the Australian Chamber of Commerce and Industry, in which he is set to signal a pivot in the government's fiscal strategy and anticipate a large deficit in the upcoming budget. He will also announce an overhaul of bankruptcy legislation, which will allow businesses with liabilities of under $1 million to retain control over their companies for 20 days to draw a restructuring plan.
  • As the JobKeeper supplement is set to be reduced tomorrow, Frydenberg noted that "at the end of the year we'll revisit the rate for the JobSeeker coronavirus supplement and we're leaning in to provide continued support".
  • The rate last sits at $0.7075, a touch above neutral levels. Bears look for a fall through the 38.2% retracement of the Mar - Sep rally at $0.6965 before targeting Jul 14 low of $0.6921. Bulls look to take out Sep 9 high of $0.7192, followed by Sep 22 high of $0.7235.
  • On the data front, focus moves to flash trade data, due Friday.

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