FXStreet notes that AUD/USD has slided back to around 0.7050. Nerves are understandable ahead of next week’s massive risk events – Reserve Bank of Australia (RBA) and US election results on consecutive days. RBA easing steps should be priced but surely cap A$ rallies while further equity turbulence is likely into and in the wake of US Election Day but the aussie has potential to rebound on a Blue Wave outcome, per Westpac.

“...volatility seems assured even if we do get the market-preferred Blue Wave that would brighten the prospects for US fiscal support both short and medium-term. Such a prospect is one of the assumptions in our 0.75 year-end forecast.” 

“Q3 CPI was firmer than we expected but with the RBA placing greater emphasis on actual inflation, we are a long way from the 2-3%yr target – see across. The RBA’s rate cuts to 0.1% cash and 3 year are expected but uncertainty lingers over the shape of a new QE program.”

“Overall, we see risks of a break of 0.7000/10 support pre-election but scope for a sharp rebound if equities recover.”