Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Australian Dollar Falls Alongside Copper and Iron Ore Ahead of RBA Minutes

Australian Dollar Falls Alongside Copper and Iron Ore Ahead of RBA Minutes

Thomas Westwater, Analyst

Australian Dollar, AUD/USD, Economy, China, Iron Ore, Copper, RBA - TALKING POINTS

  • US Dollar strength weighed on the risk-sensitive Australian Dollar after poor data prints
  • The RBA’s August policy minutes in focus ahead of wage data due out later this week
  • AUD/USD approaches the 0.7000 psychological level after a big overnight drop
AUD Forecast
AUD Forecast
Recommended by Thomas Westwater
Get Your Free AUD Forecast
Get My Guide

Tuesday’s Asia-Pacific Outlook

A stronger US Dollar weighed on the Australian Dollar after poor US economic data added to recession fears. The New York Fed’s Empire State Manufacturing Index for August fell to -31.3 on weak new orders and shipments. US stocks opened lower but trimmed losses throughout the Wall Street trading session. The benchmark S&P 500 ended 0.40% higher as Fed pivot bets strengthened some.

On Monday, China reported weaker-than-expected retail sales and industrial production data for July. China’s central bank, the People’s Bank of China (PBOC), unexpectedly lowered its 1-year medium-term lending facility rate by 10 basis points. The surprise move sparked demand for Chinese government bonds, sending China’s 10-year yield to its lowest level since January. The Yuan weakened more than 1% against the USD.

Crude oil prices fell in New York trading despite China’s signal of support for its economy. WTI crude and Brent crude prices slipped nearly 3%. Copper and iron ore prices also came under pressure, which weighed on the commodity-sensitive Australian Dollar. In Europe, natural gas prices surged as the Rhine River saw its water level drop further. German 1-year ahead energy prices hit another fresh record high.

The Reserve Bank of Australia (RBA) will release its August policy minutes today, which may provide markets with additional insight into the central bank’s thinking. Australia’s second-quarter wage price index is expected to climb from 2.4% y/y to 2.7% y/y later this week. A larger-than-expected increase would likely fuel some hawkish RBA bets to the Aussie Dollar’s benefit. Melbourne-based BHP Group’s second-half earnings are also due this morning.

Notable Events for August 16:

Philippines – Retail Price Index (May)

Japan – Tertiary Industry Index MoM (June)

India – WPI Food YoY (July)

AUD/USD Technical Outlook

AUD/USD pierced below its 100-day Simple Moving Average and prices look poised to test the 0.7000 psychological level at the current calculus. The 12-day Exponential Moving Average (pink line) offered some intraday support shortly above the psych level. A break below those levels would threaten to drag prices negative for the month. The Relative Strength Index (RSI) is tracking lower towards its centerline.

AUD/USD Daily Chart

audusd chart

Chart created with TradingView

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES