- The AUD/USD has barely moved and remains in the red around 0.7165 post-RBA minutes release.
- RBA minutes cite trade tensions as a source of uncertainty and risk to the upbeat economic outlook.
- The Aussie dollar could take cues from the yuan during the day ahead.
The AUD/USD is trading around 0.7165, representing moderate losses on the day, with upside likely being capped by escalating US-China trade tensions.
The minutes of the Reserve Bank of Australia September monetary policy meeting released a few minutes ago sounded upbeat on the healthy labor market, cheered falling currency and resilient household consumption, but warned that trade tensions pose a “material risk” to the economy.
That trade tensions could hurt the Australian economy is well known by now, hence the RBA’s warning is not having any impact on the Aussie dollar.
That said, the Australian currency could come under pressure if the Chinese yuan drops sharply on escalating trade war with the US.
US President Donald Trump announced a 10 percent tariff on imports worth $200 billion annually from China. More importantly, the tariff rate on the latest batch of goods will rise to 25 percent on January 1, 2019.
AUD/USD Technical Levels
Resistance: 0.7202 (Aug. 15 low), 0.7229 (Sept. 13 high), 0.7256 (61.8% Fib R of 0.7362/0.7085)
Support: 0.7142 (previous day’s low), 0.71 (psychological support), 0.7085 (Sept. 11 low)
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