AUD/USD on a downward spiral
The Australian dollar slipped to a three-week low this morning as the RBA looks set to enhance monetary easing. Current consensus is that the additional stimulus is likely to be announced during the RBA’s Nov. 3 policy meeting. Specifically, the central bank is expected to cut the interest rate to a new record low of 0.1% from the current 0.25% and possibly boost bond purchases in the five to 10-year window.
As a major risk currency, the AUD tends to follow global stock markets trends and is generally seen as a leading indicator of risk appetite. A generally weak USD has helped the AUD higher recently but we see a major trend reversal today.
With growing uncertainty in the Covid-19 pandemic, the strength in the USD might return and we hence sold this pair at 0.7034 with SL at 0.7135 and TP at 0.6835.
Author
Frank Walbaum
FX Strategies.Asia
Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.
