- The Australian Dollar slips in early Tuesday trading during the Asian session.
- Renewed demand for the USD and concerns over Trump’s tariff threats pressure the currency, though hawkish expectations for the RBA may limit further losses.
- Investors await the US October JOLTs Job Openings report and key Fedspeak scheduled for Tuesday.
The Australian Dollar (AUD) continues its decline, nearing 0.6470 in early Tuesday’s Asian session, pressured by a stronger U.S. Dollar (USD), which has climbed to a three-day high. Market sentiment remains cautious amid renewed concerns of a global trade war under U.S. President-elect Donald Trump, adding further downside pressure on the AUD.
However, hawkish remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock may help limit losses. Last week, Bullock emphasized that core inflation remains too high to consider near-term rate cuts, boosting demand for the AUD.
Later on Tuesday, investors will turn their attention to the U.S. JOLTs Job Openings report for October and speeches by Federal Reserve officials Adriana Kugler and Austan Goolsbee. On Wednesday, the focus will shift to Australia’s third-quarter GDP data, which could provide further direction for the AUD.
Australian Dollar Eases Amid Tariff Concerns
- Australia’s Retail Sales rose 0.6% MoM in October, surpassing both the 0.1% increase in September and market expectations of 0.3%, according to the Australian Bureau of Statistics (ABS) on Monday.
- In the U.S., the ISM Manufacturing PMI climbed to 48.4 in November, beating the previous 46.5 and surpassing the forecast of 47.5.
- Atlanta Fed President Raphael Bostic stated on Monday that he remains undecided on a potential rate cut in December but believes further rate reductions may be necessary in the coming months, according to Bloomberg.
- New York Fed President John Williams suggested that additional rate cuts might be required to bring monetary policy to a neutral stance as risks to inflation and employment have become more balanced.
- Fed Governor Christopher Waller expressed support for a potential rate cut in December, citing expectations that inflation will continue easing toward the Fed’s 2% target.
Technical Analysis: Australian Dollar’s Downward Momentum Persists
The Australian Dollar continues to weaken, with AUD/USD maintaining a bearish trend on the daily chart. The pair remains below the key 100-day Exponential Moving Average (EMA), reinforcing the downward bias. Additionally, the 14-day Relative Strength Index (RSI) is positioned below the 50 mark, favoring sellers in the near term.
A break below the November 26 low of 0.6434 could invite further selling pressure, potentially driving AUD/USD toward the lower boundary of the descending trend channel at 0.6330. If bearish momentum persists, the pair could fall to 0.6285, last seen on October 3, 2023.
Conversely, a sustained move above the upper trend channel boundary at 0.6530 may open the door for a rally toward 0.6626, aligning with the 100-day EMA. A further break above this level could target 0.6687, the November 7 high.
