AUD/USD falls for straight fifth trading session on global slowdown fears
- AUD/USD refreshes weekly low near 0.6560 as the broader market mood is risk-off.
- Fed Powell considered current monetary policy as inadequate to bring down inflation to 2%.
- The RBA MPS report indicated that further tightening would be largely dependent on incoming data.
The AUD/USD pair continues its losing streak for the fifth trading session as fears of a global slowdown have deepened after hawkish commentary from Federal Reserve (Fed) Chair Jerome Powell in his commentary at the International Monetary Fund (IMF) on Thursday.
The S&P500 opens on a bullish note as fears of widening Middle East tensions have started fading. Investors see conflicts remaining contained between Israel and Palestine and may Iran would not intervene. The US Dollar Index (DXY) consolidates near 105.80, struggling to extend recovery, as investors shift focus to US inflation data for October, which will be published next week.
Jerome Powell, in his commentary, showed no confidence in the current monetary policy, considering it inadequate to bring down inflation to 2% in a timely manner.
The expectations that the Fed may not be able to achieve price stability with current interest rates are prompted by a resilient US economy. The world’s largest economy is performing stronger on the grounds of consumer spending and the labor market, which could slow the progress in inflation returning towards 2%.
On the Australian Dollar front, the Reserve Bank of Australia (RBA) released its Monetary Policy Statement (MPS) on early Friday. The report indicated that further tightening would be largely dependent on incoming data. The RBA warned that inflation has turned out persistent more than expected. As per the forecasts, inflation is seen easing to 4.5% by 2023, 3.5% by 2024, and 3.0% by the end of 2025.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
