AUD slumps 1.53% on US dollar strength
|AUD - Australian Dollar
The Aussie has slumped 1.53% in overnight trading to open this morning at 0.7623. Bearish market sentiment drove the Aussie sell-off as doubts about the European economic recovery flustered the market. Global equity markets added fuel to the fire also, with equity indexes around the world remaining flat or in the red. This comes despite a 3.75% decline in the 10-year US bond rate, which has recently supported risk aligned currencies. Nevertheless, there have been significant flows into safe-haven currencies with the Greenback leading the way.
Moving into Wednesday, the Aussie again turns offshore for significant direction with only Flash Manufacturing and Services PMI to look forward to at home.
Key Movers
The Greenback was the clear beneficiary in overnight trading as risk sentiment turned decidedly negative. The US Dollar Index (DXY) rose a steady 0.67% to 92.36 as a consequence of risk-off flows into safe haven currencies. This comes despite a fall of 3.75% in the 10-year bond rate. Moving forward, Fed Chair Powell and Treasury Secretary Yellen have begun a two-day hearing in front of lawmakers. So far there hasn’t been anything new or market moving to digest, but that may change in tomorrow's session.
Across the Atlantic, both the euro and sterling had a day to forget with the euro falling 0.68% against the Greenback and the sterling falling 0.76%. Opening this morning at 1.1849 and 1.3749 respectively, it was again a story of US dollar strength that drove the currencies south although a third COVID-19 wave and new lockdown measures employed by some countries certainly did not help.
Expected Ranges
AUD/CAD: 0.9503 - 0.9694 ▼
AUD/EUR: 0.6365 - 0.6494 ▼
GBP/AUD: 1.7848 - 1.8210 ▲
AUD/NZD: 1.0785 - 1.1002 ▲
AUD/USD: 0.7549 - 0.7702 ▼
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