AUD/USD slumps to multi-week lows on broad USD strength, trades below 0.7060
|- RBA remains cautious on policy outlook, weighs on the AUD.
- US Dollar Index gains traction in the NA session.
- Coming up: Retail sales, trade balance data from Australia.
The AUD/USD pair, which came under pressure in the Asian session and broke below the 0.71 handle, extended its slide and touched its lowest level in three weeks at 0.7053. As of writing, the pair was trading at 0.7056, losing 0.77% on a daily basis.
As expected, the RBA announced early in the day that it decided to keep its policy rate unchanged at 1.5%. Nevertheless, the RBA adopted a cautious tone in its policy statement and weighed on the AUD. "A few changes to the RBA statement highlight the Bank’s uncertainty about the outlook. In particular, the changes to the final paragraph could be an attempt to flag that the Bank’s is keeping all options on the table. In the lead up to the May Statement on Monetary Policy, the RBA staff will be revising the Bank’s forecasts," ANZ analysts said.
With investors turning their attention to the USD in the second half of the day, the bearish pressure on the pair gathered strength. Although today's mixed durable goods orders data didn't necessarily paint an optimistic picture regarding the economic outlook, the dollar continues to find demand as a more reliable currency when compared to its European counterparts that suffer from weak data and political uncertainties. At the moment, the US Dollar Index is up 0.13% on the day at 97.46.
AIG's Performance of Services Index, retail sales, and trade balance data from Australia will be looked upon for fresh impetus in the Asian session on Wednesday.
Technical levels to consider
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