Monday, September 25, 2023
HomeUncategorizedAUD/USD retraces from session highs, slips to 0.6870 area

AUD/USD retraces from session highs, slips to 0.6870 area

  • AUD/USD hit a daily low near 0.6929 but fell as sentiment turned sour.
  • Global stocks fall as investors brace for Fed’s Jerome Powell speech on Friday .
  • The PBOC rate cut pushed AUD/USD slightly above 0.6900, then fell to a daily low.

    Australia/USD in The North American session edged lower and global stocks slipped as traders braced for comments from Federal Reserve Chairman Jerome Powell on Friday. The above reflected a slump in global stock markets, which fell between 1.40% and 2.30%, led by U.S. stocks.

    AUD/USD is trading at 0.6875 after hitting a daily high of 0.6929, 0.02% lower than the opening price, slightly higher at the 50-day moving average. Nonetheless, the major currencies fell from 0.6900 as the dollar generally strengthened.

    Meanwhile, the U.S. dollar index, which measures the U.S. dollar against a basket of peers, rose nearly 0.60% to 108.729, closing at a year-to-date high of 10.9. 294.

    Meanwhile, the lack of economic data kept traders focused on the Jackson Hole event. Notably, last week Fed policymakers continued to say that despite encouraging inflation data, the central bank was far from declaring victory. Even the most dovish, such as the Kansas City Fed’s Esther George, have signaled a rate hike is imminent, though she mentioned the magnitude of the hike is open to question.

    At the time of writing, money market futures STIR showed investors had fully priced in a 50bps rate hike by the Fed, and There is an 82.8% chance of a 75 basis point interest rate.

    In addition, in early Asian trade, the People’s Bank of China (PBoC) cut its benchmark lending rate by 5 basis points from 3.70% to 3.65% to stimulate the economy. With China being one of Australia’s largest trading partners, AUD/USD jumped to 0.6906 on China’s decision, which was positive for the Australian economy.

    What to watch

    The Australian Economic File will show Australia’s S&P Global Purchasing Managers’ Index for August, which is expected to decline, with the exception of the Services PMI. On the U.S. front, the calendar is set for the release of the S&P Global PMI, a prelude to next week’s ISM PMI data, a Fed spokesman on Tuesday led by Minnesota Fed’s Neil Kashkari and Wednesday The start of the Jackson Hole Economic Symposium.

AUD/USD Price Analysis: Technical Outlook

From a technical point of view, AUD/USD broke through the 50-day moving average near 0.6916 but then fell, turning negative On the risk day, there was further decline towards the 5-month-old downtrend line, after the resistance area moved support near 0.6800. A daily close below last week’s low of 0.6859 would pave the way for further losses.

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