AUD/USD hits 5-day low of 0.7430 on the broad based USD rally
|Asian desks are buying US dollars in response to rising June Fed rate hike odds, courtesy of which the AUD/USD hit a 5-day low of 0.7423.
The CME FedWatch puts the probability of a 25 basis point rate hike in June at 87.7%.
Eyes US data
The second release of US GDP is expected to revise the growth rate higher to 0.9% y/y from 0.7%. A strong data might add to the bid tone around the US dollar. However, the main focus is on the US core PCE and durable goods orders data.
Fed minutes released earlier this week showed the policymakers need more evidence that the first quarter slowdown was transitory. Consequently, the USD could be sold aggressively heading into the weekend if the US data disappoint expectations.
China opts for scrap
The Aussie side of the story looks weak, given the potential for further losses in iron ore prices. A fresh headwind for iron ore is the increasing use of scrap in China.
Furthermore, gold prices (key Aussie export) could remain under pressure ahead of the June Fed.
AUD/USD Technical Levels
The trend line sloping downwards from the March high and April high is seen offering support at 0.7422, which, if breached, would open up downside towards 0.7389 (May 17 low) and 0.7368 (May 5 low). On the other hand, a break above 0.7448 (10-DMA) would expose 0.7467 (5-DMA) and 0.75 (zero levels).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.