The Australian Dollar (AUD) is struggling to maintain gains from the previous session, trading around 0.6670 on Wednesday as the US Dollar (USD) strengthens alongside rising Treasury yields. Increased market risk aversion, driven by the potential for Donald Trump’s return to the presidency, is contributing to selling pressure on US Treasury bonds.
While the AUD faces challenges, hawkish sentiment surrounding the Reserve Bank of Australia (RBA) and positive employment data provide some support. Additionally, China’s recent rate cuts could boost demand for Australian exports, as China remains Australia’s largest trading partner.
Market expectations suggest a 91% probability of a 25-basis-point rate cut by the Federal Reserve in November, with no significant cuts anticipated. RBA Deputy Governor Andrew Hauser expressed surprise at strong employment growth, emphasizing a data-dependent approach.
Technical analysis indicates a bearish outlook for the AUD/USD pair, with potential support at six-week lows of 0.6622 and psychological levels at 0.6600. Resistance is seen at 0.6698 and 0.6733, with a break above these levels possibly opening the door to 0.6800.
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