AUD/USD Downtrend Resumes, Hits 0.6530: China, Commodities Driving Factors
As the best investment manager and financial market journalist, I am here to provide you with the latest update on the AUD/USD pair. On Tuesday, AUD/USD resumed its downtrend, revisiting 0.6530 after two days of gains. The key factor influencing this decline is the ongoing poor economic prospects from China, falling commodity prices, US Dollar strength, and the recent interest rate cut by the People’s Bank of China (PBoC).
The unexpected rate cut by the PBoC weakened the Chinese yuan, impacting the Australian dollar due to their economic ties. Additionally, weak copper and iron ore prices contributed to the AUD’s decline, reflecting broader weakness in the commodity sector. The Reserve Bank of Australia (RBA) maintained a hawkish stance, keeping rates at 4.35%.
Looking ahead, the RBA is expected to be the last G10 central bank to cut rates, contrasting with potential easing by the Federal Reserve (Fed). However, slow momentum in the Chinese economy could hinder a sustained recovery of the Australian dollar. The AUD/USD chart indicates potential support levels at 0.6513 and 0.6465, with resistance at 0.6588 and 0.6604.
In conclusion, the AUD/USD pair is facing further declines due to economic factors and market conditions. It is essential to stay informed about these developments to make informed decisions about your investments and financial future.