The AUD/USD pair comes under intense selling pressure on Tuesday and extends its steep intraday downfall through the first half of the European sessio
n. The momentum drags spot prices to the 0.6370 area, back closer to the YTD low touched in August, and is sponsored by a combination of factors.
The Australian Dollar started weakening after a private survey showed that business activity in China's services sector expanded at its slowest pace in eight months. In fact, the Caixin/S&P Global Services PMI dropped from 54.1 to 51.8 in August, registering the lowest reading since December 2022 and reviving concerns about the worsening conditions in the world's second-largest economy.
As was widely anticipated, the Australian central bank decided to stick to its wait-and-see stance and left the Official Cash Rate unchanged at 4.10% for the third straight month. In the accompanying monetary policy statement, thereiterated that some further tightening may still be needed to curb inflation, which remains on track to reach the 2-3% target range by mid-2025.
Tuesday's sharp decline could further be attributed to resurgent US Dollar demand, bolstered by growing acceptance that the Federal Reserve will keep interest rates higher for longer. Despite signs that labour market conditions in the US were easing, the markets are still pricing in the possibility of one more 25 bps Fed rate hike move by the end of this year.
Apart from the aforementioned fundamental factors, a sustained break through an ascending trend-line, extending from the YTD low, aggravates the bearish pressure. Moreover, acceptance below the 0.6400 round-figure mark could be seen as a fresh trigger for bearish traders and suggests that the path of least resistance for the AUD/USD pair is to the downside.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
AUD/USD Price Analysis: Bearish flag pattern spotted on hourly charts ahead of RBA on TuesdayThe AUD/USD pair attracts some dip-buying near the 0.6440 area or a four-day low touched during the Asian session on Monday and stalls last week's mod
Read more »
AUD/USD recovers from the recent losses, treads waters to remain above 0.6450AUD/USD recovers from the previous session’s losses, trading higher around 0.6460 during the Asian session on Monday. The pair experienced downward pr
Read more »
AUD/USD now seen trading within a range bound themeAUD/USD is now expected to trade within the 0.6390-0.6525 range in the next few weeks, according to Economist Lee Sue Ann and Markets Strategist Quek
Read more »
AUD/USD Price Analysis: Trades inside Friday’s range ahead of RBA monetary policyThe AUD/USD pair auctioned inside Friday’s trading range of 0.6438-0.6522 on Monday as investors await the interest rate decision by the Reserve Bank
Read more »
AUD/USD rebounds ahead of RBA’s decision, as Wall Street pauses on Labor DayThe Australian Dollar (AUD) pared some of its last Friday’s losses against the US Dollar (USD) ahead of the upcoming Reserve Bank of Australia’s (RBA)
Read more »
AUD/USD fades recovery near 0.6450 ahead of Governor Lowe’s final RBA decisionAUD/USD portrays the pre-event anxiety as it stays defensive around the mid-0.6400s during the early hours of Tuesday’s Asian session. In doing so, th
Read more »