The AUD/USD currency declined significantly today to reverse the bullish trend that the currency pair has enjoyed since the beginning of the year. This was a major reversal from the currency pair’s rally witnessed yesterday after the release of positive Australian employment data for the month of January.
The currency pair had lost close to 50 points from its daily high and was on a downward trend as at the time of writing. The Australian dollar weakened against the US dollar even as the International Monetary Fund released a mediocre outlook for Australia, which contradicts the Reserve Bank of Australia‘s positive outlook.
The currency pair started losing momentum yesterday as investors were not convinced of the Australian economy’s stability, despite RBA Governor, Philip Lowe‘s assurance that the days of monetary easing might be over. The rising levels of household debt in Australia have also contributed to lower investor confidence in the Aussie.
The currency pair’s performance was also affected by the stronger US dollar as markets priced in the likelihood of a Fed rate hike in March as well as Donald Trump‘s ‘phenomenal tax’ announcement.
The release of the minutes of the RBA’s board meeting scheduled for Tuesday next week is likely to increase the selling pressure on the currency pair.
The AUD/USD was trading at 0.7661 as at 18:44 GMT having hit a daily high of 0.7713, which is a loss of close to 50 pips for the day. The AUD/JPY was trading at 86.47 having opened the day’s session trading at 87.24.
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