The Australian Dollar (AUD) has extended declines from last week’s 0.7260 high dropping against the US Dollar (USD) to 0.6950 this morning from the weekly open of 0.7080. It’s the first time since January this year the cross has gone below 0.7000 the physiological level as it clocks a new June 2020 low. Equity indices travelled lower overnight as well as a basket of main commodities including iron ore has come off 5% since last Thursday adding to the AUD woes. Market participants are spooked by the prospects of higher inflation in the US and short-term interest rates as they try to reign this in inflation and reducing its bond holdings – a move which could lead to slower long-term growth and earnings and raising fears of a possible recession. Key data this week in the cross is CPI m/m in the US. Buyers of USD should consider at these levels with a heavy bias to the downside remaining.
Current Level: 0.6916
Last Weeks Range: 0.7030-0.7262