AUD/USD dives further and hits a fresh multi-year low at 0.6275
- The Australian dollar breaks below 0.6280 to fresh 2, 1/2-year lows.
- Ukrainian war, and hopes of a big Fed rate hike are crushing the Aussie.
- AUD/USD might extend decline to 0.6041 – Credit Suisse.
The Australian dollar has resumed its decline on Monday’s US trading session. The pair has reversed the tame recovery attempt seen earlier in the day, to break below 0.6285 reaching 0.6275 area for the first time in more than two years
The aussie suffers against a strong US dollar
A risk-sensitive AUD is going through a strong bearish trend on the back of the downbeat sentiment and a strong US dollar, with the market betting on another aggressive rate hike in the US at Novermber's Fed monetary policy meeting.
Investors’ concerns about the escalation in the Ukrainian war, after Russia launched the biggest air attack since the invasion started in February, are dampening demand for the aussie, which favours safe-havens like the USD.
Beyond that, the Reserve Bank of Australia disappointed the markets last week with a 25 basis points’ rate hike, instead of the 50 BP expected, which has increased negative pressure on the pair.
AUD/USD could extend its decline to 0.6040 – Credit Suisse
According to currency analysts at Credit Suisse, the pair might still see some more downtrend before posting any relevant recovery: “With the broader risk-off environment looking set to remain in place for the upcoming months, our view is to look for a further setback towards the next key support zone at 0.6041 – the 78.6% retracement and the low from April 2020.”
Technical levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
