Category: Financial Markets

The Aussie pair slumped during the last three days, as the negative Australian employment figures pushed the pair’s latest downside amid the US bank holiday. This was further deteriorated by the talks concerning a likely monetary policy divide between the Reserve Bank of Australia (RBA) and the US Federal Reserve (Fed), as well as the US-China phase 1 deal and Evergrande.

The following graph shows the AUD/USD trend of past 06 months:

Although AUD/USD bulls were trading downwards on account of October month contraction in Australia Employment change and a six-month high Unemployment Rate, they gained a little momentum as the Aussie jobs report showed a vast gap between market forecasts and actual data. The same enables the RBA (Reserve Bank Of Australia) to reiterate its rejection of the rate hike, also citing the inflation figures which are still expected to be ranging between the 2.0% and 3.0% target. On the contrary, the 31-year high US inflation puts the rate hike on the Fed’s platter. Hence, the US Dollar Index (DXY) has this key reason to aim for a fresh high since July 2020 and extend the last two-day uptrend.

Other than the central bank actions, downbeat forecasts concerning the economic growth of Australia’s largest customer China also weighed on the AUD/USD pair, majorly due to credit crisis for real-estate companies and power cut problems.

(Source: FXStreet)

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