AUD/USD sits at 3-month lows near 0.7625 on firmer DXY, Aus politics
- Aus politics exacerbating the pain
- DXY flirts with 3-month tops
- Focus shifts to US Q3 GDP
The AUD/USD pair is seen meandering near three-month troughs of 0.7626, as markets digest the latest Aus political headlines amid extension of broad USD rally.
AUD/USD trades below all major DMAs
The Aussie extends its downward trajectory into a sixth day today, as rising demand for the US dollar and Treasury yields continue to exert bearish pressure on the prices, with markets cheering the progress on Trump’s tax overhaul plans and increased hopes of a Dec Fed rate hike.
Also, a bigger-than-expected drop in the Australian PPI data weighs down on the sentiment around the AUD. More so, the renewed Australian political drama, as the government loses majority after the Deputy PM Joyce was ejected in a citizenship ruling, further collaborates to the downside in the major.
Australia PM Turnbull loses majority after court citizenship ruling - Bloomberg
The recent sell-off in the Aussie pair gained traction after the release of worse-than-expected Australian Q3 CPI data, which came in well below the RBA’s 2-3% price target. On the other hand, upbeat US durable goods and housing data continue to back the case for a Dec Fed rate hike, bringing monetary policy divergence between the Fed and RBA back in play.
Further, renewed uptick seen in Treasury yields across the curve also exacerbated the pain in the major. Rising demand for the US rates weighs down on the alternative risk currency AUD. More so, the USD bulls gear up for the US durable goods data, which could seal in a Dec Fed rate hike, bringing the monetary policy divergence back in play between the Fed and RBA.
Meanwhile, markets paid little attention to the solid Chinese industrial profits data, as the main risk event for today remains the US Q3 advance GDP release,
AUD/USD Levels to consider
Jim Langlands at FX Charts. noted: “The Aud looks heavier by the day and staying short, looking to add to the position seems to be the plan today. 0.7690/0.7715 should provide decent resistance as we look for a run towards 0.7630 and below that, eventually towards 0.7570.”
