Australian dollar, AUD / USD, PMIs, Covid, risk trends – call points
- Australian dollar in focus after a large weekly decline versus US dollar
- PMI’s August data show that the Australian economy continues to slow
- AUD / USD the technical outlook awaits a severe setback after a major decline
Monday ‘s outlook for Asia – Pacific
The Australian dollar is responding to a recent round of economic data to begin Monday’s session following last week’s announcement. Markit Economics released PMI data this morning showing the Australian economy continues fight in the midst of nationwide closures. Services PMI remained in the contraction territory at 43.3. Production PMI fell 51.7, which indicates a slower expansion rate.
Australia’s worse PMI is likely to hold the currency. AUD was the worst performing G10 currency last week, falling just over 3% versus US dollar. The New Zealand Dollar was the second second followed Canadian dollar. A burning wave of infection centered around New South Wales (NSW) Sydney explained Australian dollar accidents.
At the end of last week, NSW Prime Minister Gladys Berejiklian Greater Sydney announced the extension of the closure until the end of September. The head of state also pointed out more restrictive measures, including wearing masks outdoors and a movement ban. This step threatens to put the already slowed economy on the brink of recession, the second since the pandemic in early 2020. This leaves the Australian dollar low for bulls. Later this week, Australia will see July retail sales through the wires.
Accordingly, the Bank of Australia’s (RBA) interest rate hikes have fallen need deteriorating developments. This is contrary to what traders see United States of America, federal fund futures is prices with a probability of 19.8% for 25 basis points Feeded interest rate increase in June 2022 FOMC meeting, according to the CME Group FedWatch Tool. That is 17.9% on August 13.
Nevertheless, the concerns of the Delta option penetrate the Fed’s thinking. President of the Dallas Federal Reserve Robert Kaplan, the first member of the Fed to call for a reduction, expressed concern about the increase in Covid cases in the United States. Mr Kaplan said if signals that the virus was slowing down began to flash, it could change his mind. them should soon start to narrow down.
AUD / USD technical outlook:
AUD /USD clings to the level of trade congestion at the end of 2020, following a sharp decline last week. Prices have fallen sharply since the rise in the wedge pattern earlier this month, falling below the 200-week moving average. However, the lower movement may be exaggerated, as the RSI is sold on the territory and the MACD is the lowest in April 2020.
AUD / USD daily schedule
The chart has been created TradingView
Australian dollar trading resources
– Written by Thomas Westwater, DailyFX.com analyst
Be in touch Thomas, use the comments section below, or @FxWestwaterTwitter