|

AUD/USD plummets to near 0.6700 as RBA Lowe advocates slower pace for rate hikes ahead

  • AUD/USD has slipped sharply to near 0.6700 as RBA Lowe trims its hawkish stance on rate guidance.
  • RBA Lowe cited that consumer spending is showing resilience after remaining vulnerable.
  • A hawkish stance is expected from Fed Powell on interest rate guidance ahead.

The AUD/USD pair has plunged to near 0.6700 after surrendering the critical support of 0.6734. The asset has witnessed a vertical drop as Reserve Bank of Australia (RBA) Governor Philip Lowe has favored for slow down the pace of hiking the Official Cash Rate (OCR). Also, the RBA policymaker sees resilience in consumer spending after remaining lower due to the higher inflation rate.

On Tuesday, the RBA announced a fourth consecutive 50 basis points (bps) rate hike and elevated the Official Cash Rate (OCR) to 2.85%. Apart from that, RBA Lowe cited that the central bank sees interest rates at 3.85% and the inflation rate will top around 7%.

In the early Tokyo session, the asset witnessed a steep fall after the release of the Australian trade data. The commodity-linked currency reported a decline in monthly export data by 9.9% against an expansion of 5.1%. Also, imports have accelerated by 5.2% vs. 0.7% the prior release. The Trade Balance has trimmed dramatically to 8,733M against the expectation of 14,500M. It is worth noting that the Australian economy is highly sensitive to external trade data and a significant decline in the same is critical for the aussie bulls.

Meanwhile, the US dollar index (DXY) has turned sideways after a rebound move to near 109.60. The asset is expected to continue its lackluster movement further as investors are awaiting the speech from Federal Reserve (Fed) chair Jerome Powell. As the price rise index is highly deviated from the desired rate, Fed Powell will continue its ‘hawkish’ stance on interest rates guidance. Apart from that, a third consecutive rate hike by 75 bps could be discussed for September monetary policy meeting.

AUD/USD

Overview
Today last price0.6848
Today Daily Change0.0079
Today Daily Change %1.17
Today daily open0.6769
 
Trends
Daily SMA200.6905
Daily SMA500.6898
Daily SMA1000.698
Daily SMA2000.7119
 
Levels
Previous Daily High0.6771
Previous Daily Low0.6699
Previous Weekly High0.7074
Previous Weekly Low0.6771
Previous Monthly High0.7137
Previous Monthly Low0.6835
Daily Fibonacci 38.2%0.6743
Daily Fibonacci 61.8%0.6726
Daily Pivot Point S10.6722
Daily Pivot Point S20.6674
Daily Pivot Point S30.665
Daily Pivot Point R10.6794
Daily Pivot Point R20.6819
Daily Pivot Point R30.6866

Author

Sagar Dua

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.

More from Sagar Dua
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD falls toward 1.1700 on broad USD recovery

EUR/USD turns south and declines toward 1.1700 on Wednesday. The US Dollar gathers recovery momentum and forces the pair to stay on the back foor, as traders look to USD short-covering ahead of US inflation report on Thursday. However, the downside could be capped by hawkish ECB expectations. 

GBP/USD trades deep in red below 1.3350 after soft UK inflation data

GBP/USD stays under strong selling pressure midweek and trades below 1.3350. The UK annual headline and core CPI rose by 3.2% each, missing estimates of 3.5% and 3.4%, respectively, reaffirming dovish BoE expectations and smashing the Pound Sterling across the board ahead of Thurday's BoE policy announcements. 

Gold clings to moderate daily gains above $4,300

Following Tuesday's volatile action, Gold regains its traction on Wednesday and trades in positive territory above $4,300. While the buildup in the USD recovery momentum caps XAU/USD's upside, the cautious market stance helps the pair hold its ground.

Bitcoin risks deeper correction as ETF outflows mount, derivative traders stay on the sidelines

Bitcoin (BTC) remains under pressure, trading below $87,000 on Wednesday, nearing a key support level. A decisive daily close below this zone could open the door to a deeper correction.

Monetary policy: Three central banks, three decisions, the same caution

While the Fed eased its monetary policy on 10 December for the third consecutive FOMC meeting, without making any guarantees about future action, the BoE, the ECB and the BoJ are holding their respective meetings this week. 

AAVE slips below $186 as bearish signals outweigh the SEC investigation closure

Aave (AAVE) price continues its decline, trading below $186 at the time of writing on Wednesday after a rejection at the key resistance zone. Derivatives positioning and momentum indicators suggest that bearish forces still dominate in the near term.