The AUD/USD pair continues its downward trend for the ninth consecutive trading session, with the Australian Dollar (AUD) facing pressure from weak Chinese and Australian economic outlook. Investors are now eagerly awaiting the release of US Q2 GDP data to assess the current state of the economy’s health.
Amid concerns over China’s economic prospects, the Australian Dollar has been heavily impacted. The lack of strong liquidity measures to boost growth in China, along with a surprise rate cut by the People’s Bank of China (PBoC), has contributed to the decline in the AUD. The Australian Dollar, being a liquid proxy to China’s economy, has also been affected by the drop in global iron ore prices.
Market sentiment ahead of the US Q2 flash GDP release has further weighed on the Australian Dollar. The US economy is expected to have expanded at a robust pace of 2.0%, prompting speculations of early rate cuts by the Federal Reserve (Fed).
Analysis:
The weakening of the Australian Dollar due to concerns over China’s economic outlook and the anticipation of US Q2 GDP data reflects the interconnectedness of global economies. As an investor, it is crucial to monitor these factors to make informed decisions about currency investments. The decline in the Australian Dollar can also have implications for trade balance and economic growth in Australia, affecting various sectors of the economy.