The US election continues to drive market sentiment generating safe haven demand as risk continues to weigh causing a negative setup for a number of Australian Dollar crosses. AUD/JPY has settled down after recovering some of yesterday’s losses opened in a tight range at 79.000. Despite bearish momentum it remains unlikely a neutral Aussie policy statement (00:30GMT) will cause generate much Aussie strength as the volatile situation in the US takes centre stage
USD/JPY moved lower as election uncertainty and the fallout from stocks moved price below the 100DMA ahead of significant US employment labour market statistics including unemployment numbers and the non-farm payrolls. Expectations are for a dip in unemployment below 4.9% whereas non-farm expectations are forecast at 173k vs last month’s 156k. Additional polls citing Republican candidate Donald Trump as the victor have pushed US major indices down for the 8th consecutive day.
Last night GBP traded above 1.2465, its highest level since the flash crash and opened 1.3% higher amid an court ruling on its EU membership, US election nerves, and a hawkish Bank of England monetary policy statement. A British High Court ruled that Article 50 needed parliamentary approval meaning prime Minister May must bring a Brexit proposal before the British Parliament who will either honour the will of the voters, and vote to continue with Brexit by triggering article 50, whilst providing the potential for them to ignore the results of the referendum in hopes of a renegotiation with the European Union. Bank of England Governor Carney also helped lift the currency delivered a hawkish statement as he cited strong projected inflation figures likely due to the outcome of a weak currency.
