AUD/USD confined to tight range, 0.7590-0.7710, ahead of key week

AUD/USD is currently in a consolidation of last week's end of quarter and month's business where the Aussie caught a bid from 0.7589 to 0.7671 highs.

AUD/USD, is however, struggling to offer any conviction, with continued failures around the 0.77 handle leading to heavy supply. The greenback is pulled and pushed on the back of sentiment in respect to the Fed and U.S. elections while at the same time, it attracts a bid in risk-off play while the Aussie struggles, despite the yield differential between the two currencies.

China: the official manufacturing above 50 in September - Nomura

The Aussie has also found some additional support from the RBA's less dovish rhetoric of late with former assistant governor, Debelle, taking on the full title and leadership from Stevens yet not as dovish or concerned about the inflation target leading to a bid in the Aussie. Meanwhile, China comes back into play, already offering official manufacturing PMI's above 50, the Yuan now held in the IMF's reserves for the first time since 1999 and becoming an official reserve currency.  However, focus will now turn back to the RBA this week who are meeting and of course US data at the end of the week in Nonfarm payrolls.

AUD/USD levels

In respect of levels 0.7700 is a toughnut on the upside, and in the short -term, no reason for the market to move out of its recent ranges of between 0.7590-0.7710 range for an eighth consecutive day, as notedby analysts at Westpac who also offered a 1-3 month outlook as follows: "While further gains to around 0.77 are possible during the month ahead, driven in part by the faltering US dollar and yield-chasing flows, the AUD is losing energy (perhaps a reflection of its declining yield advantage). By year end, there's a case for a correction towards 0.74 if the Fed tightens in December as we expect. (13 Sep)."