- Aussie remains under pressure on RBA rate cut expectations and risk aversion.
- Data from the US mostly ignored by market participants that await the FOMC meeting.
The AUD/USD pair dropped further under 0.6900 and bottomed at 0.6866, the lowest level since June 19. It remains under pressure, near the lows, on its way to the eighth decline in a row.
After hours moving in a range above 0.6900, AUD/USD broke to the downside on European hours and continued to slide during the American session. The US Dollar remains strong against emerging market and commodity currencies following US President Trump’s comments related to the trade relationship with China.
Also affecting the Aussie is a deterioration in risk sentiment on the back of lower global economic prospects and US/China tensions, partially offset by easing policies from G10 central banks.
The Federal Reserve is expected to announce on Wednesday a 25bp rate cut. It would be the first one since the 2008 financial crisis. “We expect the FOMC to deliver a 25bp rate cut. With crosscurrents persisting and inflation remaining subdued, we look for the Fed to leave the door open to further easing but to avoid pre-committing to further cuts. We expect the statement to show modest, mark-to-market changes and two hawkish dissents“, said TDS analysts.
Technical levels to watch
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