AUD/USD: Sellers dominate amid risk-off with all eyes on RBA’s Kent, AU NAB business survey


  • AUD/USD keeps the red amid the market’s rush towards safe-havens.
  • Speech from RBA’s Kent and NAB data appear on traders’ radar at a short distance.
  • The US CPI and trade/political news also become the key to watch.

AUD/USD seesaws near the previous day's low as it trades to 0.6750 during early Asian morning on Tuesday.

Commodity-linked currencies often have to bear the burden of the market’s risk aversion and so does the Australian Dollar (AUD). The Aussie occupied the bottom of G10 currencies amid investors’ run away from riskier assets amid geopolitical crisis in Hong Kong and unwelcomed political surprise in Argentina.

While protests in Hong Kong include Australia’s largest trading partner China and become the key to the quote, Alberto Fernandez’s victory in Presidential primary election took the markets by storm as he prefers currency and capital controls.

On the trade front, uncertainties surrounding September talks between the US and China prevail despite the US keep supporting the odds of negotiations.

Equities and bonds also showed a harsh reaction to the risk-off mood with the US 10-year treasury yields trimming 10 basis points (bps) in a day while making the rounds to 1.64%.

Moving on, speech from RBA’s Kent, July month data for National Australia Bank’s (NAB) Business Confidence/Condition survey results for Australia and the US Consumer Price Index (CPI) will be in the spotlight for now.

The Reserve Bank of Australia’s (RBA) Assistant Governor (Financial Markets) Christopher Kent will appear for a speech at the Finance and Treasury Association Breakfast in Sydney.

While the business confidence is likely to soften from 2 to 3, business conditions could take a back seat with 1 from 3. Further, US CPI can rise to 0.3% from 0.1% on MoM basis while likely increasing to 1.7% versus 1.6% earlier on a yearly format.

Given the increasing risk-averse market sentiment, investors will be on the lookout for any positive news before recalling their Aussie longs.

Technical Analysis

Unless breaking 0.6745/50 on the downside, prices are less vulnerable to visit 0.6683/77 are including recent low and that of January. Alternatively, last week's high near 0.6822 and June month low around 0.6831 hold the keys for the pair’s run-up towards 21-day exponential moving average (EMA) level of 0.6850.

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