The AUD/USD pair has dropped below the critical support level of 0.6750 in today’s European session as the US Dollar continues to strengthen. The Greenback is on the rise ahead of a series of important economic data releases in the United States this week.
Market sentiment remains cautious as expectations for aggressive interest rate cuts by the Federal Reserve have diminished. S&P 500 futures are showing significant losses, reflecting a risk-off mood among investors.
Investors are now focused on key economic indicators, such as the US ISM Manufacturing PMI for August, which will be released today at 14:00 GMT. The manufacturing sector is expected to show signs of improvement with a PMI reading of 47.5, up from July’s 46.8.
Meanwhile, the Australian Dollar is facing pressure as global markets turn away from risky assets. Domestically, the release of Q2 GDP data tomorrow will provide further insight into the health of the Australian economy.
Investors will also be closely monitoring RBA Governor Michele Bullock’s speech on Thursday for any hints on the central bank’s future policy direction.
Analysis and Breakdown:
The AUD/USD pair’s decline below 0.6750 signals a shift in market sentiment towards safe-haven assets, with the US Dollar gaining strength. This movement is driven by a more optimistic outlook on the US economy and reduced expectations for aggressive rate cuts by the Fed.
Investors are closely watching key economic data releases, such as the US ISM Manufacturing PMI and the Australian Q2 GDP data, to gauge the health of both economies. RBA Governor Bullock’s speech will also provide valuable insights into the future direction of Australian monetary policy.
Overall, the current market dynamics suggest a cautious approach towards riskier assets, with a focus on economic data and central bank policy decisions shaping investor sentiment in the coming days.