AUD/USD has witnessed barricades around 0.6970, downside looks favorable ahead of Fed Powell’s speech.
Fed’s Powell is expected to sound hawkish on interest rates, keeping in mind the consequences.
China’s announcement of liquidity infusion may support Australian exports.
The AUD/USD pair has witnessed selling pressures after facing barricades around 0.6970 in the Asian session. The asset is expected to display more losses as the US dollar index (DXY) is expected to pick up significant bids ahead. Investors are expected to underpin the greenback further as odds of a hawkish commentary on interest rates from Federal Reserve (Fed) chair Jerome Powell are advancing firmly.
Mixed responses from the market veterans on Fed’s next move over interest rates kept the DXY on tenterhooks in the past few trading sessions. There were different responses that either Fed should stick to its path of hiking interest rates at a severe pace or it should slow down due to the consequences of a liquidity squeeze in the market.
However, commentary from Reserve Bank of New Zealand (RBNZ)’s Governor Adrian Orr at Jackson Hole Economic Symposium has provided much clarity. As per RBNZ’s Orr, their respective central bank will announce at least a couple of interest rates to safeguard the economy from price pressures, being their foremost priority, to preserve the retail demand. And, in the execution of that, the economic activities will have to bear the slowdown. And, now a similar kind of commentary is expected from Fed’s Powell.
On the Australian front, investors are still in the hangover of the downbeat Aussie PMI data, released on Tuesday. Considering its trade relations, the Chinese economy has announced an infusion of one trillion Chinese Yuan (CNY) in its economy, which may also boost the Australian exports market apart from the Chinese economic activities. It is worth noting that Australia is a leading trading partner of China and growth prospects in China accelerate Australian exports significantly.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
