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MTrading Team • 2023-08-01

AUDUSD drops 1.0% as RBA teases doves with second status quo, US Dollar rises

AUDUSD drops 1.0% as RBA teases doves with second status quo, US Dollar rises

Risk appetite sours on early Tuesday, allowing the AUDUSD pair to please bears with a nearly 1.0% loss amid the RBA’s second consecutive inaction on the rate hike front. Also weighing on the Aussie pair could be the fears of the US-China tension, as well as downbeat China PMI data.

Elsewhere, firmer NZ housing figures failed to defend optimism surrounding the Antipodeans as the US Dollar benefits from the risk-off mood, upbeat US data and hawkish Fed talks. Further, fears of higher rates in the West and nearness to the policy pivot in the Asia-Pacific, as well as a rebound in the US Treasury bond yields exert additional downside pressure on the market sentiment and the AUDUSD price.

With this, Asian equities edge lower whereas the US stock futures struggle to track Wall Street’s gains even as the US giant corporate houses mark welcome earnings report.

That said, the prices of Gold and Crude oil pare recent gains whereas the BTCUSD and ETHUSD drop to the lowest levels in six weeks.

Following are the latest moves of the key assets:

  • Brent oil retreats from 3.5-month high, down 0.30% intraday near $85.10 at the latest.
  • Gold price drops half a percent to revisit $1,955 support, snapping two-day winning streak by the press time.
  • USD Index edges higher to 102.10 by the press time after rising to the three-week high earlier in the day.
  • Wall Street benchmarks closed with minor gains and helped the stocks in the Asia-Pacific zone to tame the losses. However, equities in Europe and UK remain mildly offered of late.
  • BTCUSD and ETHUSD print more than 1.0% daily loss to around $28,900 and $1,830 respectively by the press time.
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Risk aversion joins RBA inaction to drown AUDUSD

With the RBA’s second consecutive no rate hike, the AUDUSD traders fear the policy pivot from the Aussie central bank, which in turn joins downbeat China Caixin Manufacturing PMI for July and the fears of Sino-American tussles to weigh on the risk-barometer pair.

Adding to that, the hawkish comments from Chicago Fed President Goolsbee and upbeat US PMIs data, flashed on Monday, allow the US Dollar Index to refresh a three-week high. The same joins downbeat China catalysts to recall the Gold and crude oil sellers amid a downbeat Tuesday, following an optimistic start of the week.

Elsewhere, fears of harsh regulations and the US Dollar’s strength weigh on the BTCUSD and ETHUSD to refresh multi-day low.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

US data eyed

The risk-off mood and hawkish Fed bets propel the US Dollar, as well as weigh on the commodities and Antipodeans. However, the US ISM Manufacturing PMI for July and JOLTS Job Openings for June will be crucial to defending the greenback buyers as both of them provide clues for Friday’s US Nonfarm Payrolls (NFP).

May the trading luck be with you!