On Wednesday, the Australian Dollar (AUD) faced further losses against the USD, with AUD/USD slipping below 0.6600. Worsening concerns over China’s economic health, falling commodity prices, and weak Australian Judo Bank Flash PMI were the primary contributors to the AUD’s continued downfall.
The Reserve Bank of Australia (RBA) remains hesitant to implement rate cuts despite signs of economic weakness, which could potentially limit further AUD depreciation. However, ongoing economic troubles in China, including disappointing Q2 GDP figures and unexpected rate cuts by the People’s Bank of China, continue to weigh heavily on the AUD.
Key Points:
- AUD/USD marked more losses on Wednesday, reaching 0.6580.
- Concerns over China’s economic health and falling commodity prices are the main drivers of the AUD’s decline.
- Australia reported weak Judo PMIs during the Asian session.
Analysis:
The Australian Dollar’s decline against the USD can be attributed to a combination of factors, including China’s economic struggles, falling commodity prices, and weak economic data from Australia. The RBA’s reluctance to cut rates may provide some support for the AUD in the short term, but ongoing concerns about China’s economy could continue to put pressure on the currency.
Traders should monitor key levels, such as 0.6600 and 0.6580, for potential support and resistance levels in the AUD/USD pair. It is essential to stay informed about economic developments in China and Australia, as they can have a significant impact on the AUD’s performance in the forex market.