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  • The Reserve Bank of Australias dovish tone continues to weigh on the AUD.
  • US Dollar Index stays in daily range after the private sector employment data.
  • Coming up on Thursday: Trade balance data from Australia.  

Despite the strong selling pressure surrounding the Greenback in the second half of the day on Tuesday, the AUD/USD pair failed to stage a decisive recovery and registered its lowest daily close in more than ten years ad the Reserve Bank of Australia’s  (RBA) rate cut decision and its dovish monetary policy outlook made it difficult for the AUD to find demand.  

Although the bearish pressure seems to have eased slightly on Wednesday, the pair struggles to gain traction and is now trading at 0.6692, losing 0.15% on a daily basis.

Commenting on the RBA’s policy announcements,  “Despite a more positive assessment of Australia’s economy, the RBA seems to have left the door open to additional rate cuts,” said Wells Fargo analysts. “In the RBA’s statement as well as in Governor Philip Lowe’s subsequent speech, policymaker comments were consistent with a bias towards additional easing.”

Selling pressure on the USD softens

Meanwhile, following the heavy losses it suffered after the disappointing Manufacturing Purchasing Managers’ Index (PMI) data from the United States (US) on Tuesday, the US Dollar Index seems to have steadied near the 99.20 ahead of Thursday’s PMI figures for the service sector. The only data from the US on Wednesday showed that the private sector employment grew by 135,000 in September to miss the market expectation of 140,000 but was largely ignored by the market participants.

In the early trading hours of the Asian session on Thursday, trade balance data from Australia will be looked upon for fresh impetus.

Technical levels to watch for