Australian Dollar Falls As Inflation Fears Intensify
The Australian dollar came under pressure in the Asian session
on Tuesday amid worsening investor sentiment, as higher commodity
prices stoked concerns about inflationary pressures.
Oil prices rose after the OPEC and allies agreed to stick to its
previous decision to increase production gradually.
Concerns over China's property sector continued after Fantasia
Holdings failed to make $205.7 million payment that was due to
bondholders on Tuesday.
U.S. debt ceiling showdown also weighed after President Joe
Biden blamed Republicans for not supporting Democratic attempts to
raise the ceiling by the October 18 deadline.
Senate Republican leader Mitch McConnell sent a letter to Biden
indicating that the GOP would not vote for an increase in the debt
Australia's central bank kept its monetary policy unchanged, as
The policy board of the Reserve Bank of Australia headed by
Governor Philip Lowe decided to leave its cash rate unchanged at a
record low of 0.10 percent.
The board maintained the target of 10 basis points for the April
2024 Australian Government bond.
The aussie weakened to 0.7253 against the greenback from
Monday's close of 0.7284. The aussie is seen finding support around
the 0.70 mark.
The aussie edged down to 1.5983 against the euro, after touching
1.5926, which was its highest level since September 7. Should the
aussie slides further, 1.62 is likely seen as its next support
The aussie dropped to 0.9155 against the loonie, down from a
high of 0.9181 seen at 6:45 pm ET. Immediate support for the aussie
is possibly seen around the 0.90 level.
The aussie reached as low as 80.55 against the yen, compared to
yesterday's close of 80.74. Next key support for the aussie is
likely seen around the 78.00 level.
The latest survey from Jibun Bank showed that Japan service
sector continued to contract in September, albeit at a slower pace,
with a services PMI score of 47.8.
That's up from 42.9 in August, although it remains beneath the
boom-or-bust line of 50 that separates expansion from
The aussie pulled back to 1.0456 against the kiwi, following a
high of 1.0477 hit at 11:15 pm ET. The aussie may find support
around the 1.03 mark.
Looking ahead, PMI reports from major European economies and
Eurozone PPI for August are due in the European session.
U.S. and Canadian trade data for August and ISM
non-manufacturing PMI for September will be out in the New York
Euro vs AUD (FX:EURAUD)
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