AUD/USD drops to a three month low below 0.7650 in Asia

Thursday, 29 March 2018 09:32 WIB



The AUD/USD pair fell to 0.7645 in Asia - the lowest level since December 18 as the dollar funding costs continue to rise.

The gap between the three-month dollar London interbank offered rate (LIBOR) and three-month overnight indexed swap rate (OIS) rose to 60.300 basis points earlier this week - the widest level since May 2009.

Further, the US fourth-quarter GDP was revised higher to 2.9 percent yesterday, which was well above the estimated upward revision to 2.7 percent from 2.5 percent. Also, the sharp rise in the USD/JPY ahead of the quarter end seems to have put a bid under the US dollar.

All the above-listed factors are likely pushing the AUD/USD down to multi-month lows. Australia private sector credit growth in February (actual 0.4% m/m, expected 0.3%) had little impact on the pair and so did the upbeat labor data.

Looking ahead: the spot may extend losses further if the risk aversion  equities worsens and the US personal spending figure prints above estimates.

AUD/USD Technical Outlook

FXStreet Chief Analyst Valeria Bednarik sees little signs of a turnaround in the pair.

"The pair is in the middle of a bearish trend, with no signs of changing course and poised to complete a 100% retracement to December low at 0.7500. Short-term technical readings support a new leg lower for the upcoming session, as in the 4 hours chart, the pair is developing well below a bearish 20 SMA, while technical indicators decelerated just partially, maintaining their downward slopes near oversold readings.

Source: FXstreet


  • The dollar slipped lower on Thursday as expectations for further Federal Reserve rate cuts waned, while the euro gained ground after Eurozone private sector data boosted hopes that the bloc's economy ...



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