AUD/USD broke the ongoing bearish consolidation phase further to the downside in the European session this Thursday, with the rate now printing fresh six-day lows at 0.7625.
Despite recovery in risk sentiment and a minor-rebound in copper prices, the Aussie remains heavily offered so far this session, as the recent declines in the Chinese iron-ore prices undermine the sentiment around the resource-linked AUD.
Meanwhile, an upward correction in the greenback in tandem with the treasury yields, also accelerate the downslide in the major. However, main driver behind the selling spiral in Aussie is the iron-ore sell-off, with markets believing that it’s just the beginning of a correction in the ferrous metal, as still remains 22.2% up so far this year.
The bearish outlook on the Chinese iron-ore futures (DCE contracts) implies any rallies in the AUD pair is likely to be short-lived until both iron-ore and copper prices show convincing signs of a reversal. Australia is highly dependent on iron-ore and copper exports for its revenues.
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