AUD to USD - The Australian Dollar (AUD) continues to decline for the second consecutive day on Friday, reaching a weekly low. The AUD/USD pair fell as the US Dollar (USD) gained new momentum, fueled by Producer Price Index (PPI) data from the US that exceeded expectations. This data complicates projections regarding when the Federal Reserve will lower interest rates.
 
The S&P/ASX 200 index in Australia dropped to its lowest level in three weeks due to widespread selling in the market. Australian stocks followed the decline in Wall Street yesterday, particularly among major banking and iron ore mining stocks.

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The Reserve Bank of Australia (RBA) remains poised to potentially raise interest rates further, with the RBA's policy decision scheduled for next week. Traders are likely to monitor the Michigan Consumer Sentiment Index from the US, which will be released on Friday.
 
The US Dollar Index (DXY) saw an increase due to the hawkish stance of the Federal Reserve considering keeping interest rates high to combat persistent inflation pressures. US Treasury yields also rose for four consecutive sessions, providing additional support for the US Dollar (USD) and lowering the value of the AUD/USD pair.
 
The Australian Dollar declined following strong US PPI data. Business confidence in Australia, as measured by the NAB, stagnated, while RBA interest rates are expected to remain unchanged until the end of September. According to the RBA Governor, Australian inflation is driven by domestic factors, who also warned of two-way risks to interest rates.
 
The People's Bank of China maintained its MLF interest rates, while the US Treasury Secretary expressed doubts that rates would return to pre-pandemic levels. The likelihood of a Fed rate cut fluctuates according to the CME FedWatch Tool. US PPI data showed a year-over-year increase that exceeded expectations, while US retail sales rose below expectations.
 
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This analysis titled “AUD to USD Today: The AUD Dollar and ASX 200 Plunge Together!” is based on views from fundamental and technical perspectives from reliable sources and is not to be construed as advice or solicitation. Always remember that the content aims to enrich the reader's information. Always conduct your own independent research regarding other forex information to use as a reference in your trading.
 
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