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DailyBubble News

AUD/USD weakens further as US Treasury yields boost US Dollar

The AUD/USD pair dropped 0.26% due to higher US Treasury yields and risk aversion, leading to a two-day decline of 0.70%. The Reserve Bank of Australia (RBA) kept rates steady, but negative market reaction was seen for AUD/USD following nuanced inflation comments. Boston Fed President Susan Collins echoed US Fed caution, warning against premature rate cuts amid expectations of a cut in September.

The Australian Dollar continued to lose ground against the US Dollar for the second consecutive day as higher US Treasury bond yields supported the Greenback. The AUD/USD lost 0.26% on Wednesday as investors turned risk-averse ahead of upcoming US data releases and next week’s inflation report. The pair currently trades at 0.6577 as the Asian session begins.

Financial markets are closely watching for signs of central bank policy easing. The RBA decided to keep rates unchanged but hinted at cooling inflation, leading to a negative market reaction for the Aussie Dollar. RBA Governor Michele Bullock maintained a balanced tone during the press conference, mentioning the possibility of rate hikes at the meeting.

On the US front, Federal Reserve officials continued to make statements, with Boston Fed President Susan Collins expressing caution about cutting rates too soon. The swaps market has already priced in a decrease in RBA rates over the next six months, while the CME FedWatch Tool shows increased odds of a rate cut by the Fed in September.

In terms of technical analysis, the AUD/USD pair is neutral to upward biased, with resistance levels at 0.6667 and 0.6700. Support levels can be found at the 100-day moving average at 0.6577, the 50-DMA at 0.6535, and the 200-DMA at 0.6515.

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