The AUD/USD pair is currently trading at 0.7076; a level last seen on Jan. 4; having carved out a bearish-lower high above 0.72 over the last 10 ten days.
The currency pair fell 0.68 percent yesterday - its biggest single-day drop since Jan. 2 - as an out-of-cycle mortgage rate hike by the National Bank of Australia (NAB) boosted prospects of an RBA rate cut.
Cash rate futures now put the odds of a 25 basis point decrease in the cash rate by November this year as a two-in-three chance, according to Business Insider.
The market narrative is that the hike in variable interest rate mortgages will likely accentuate the housing market slowdown and force the RBA to cut rates.
No wonder, the Australian currency is feeling the pull of gravity. The sell-off could gain further traction if the US-China trade optimism fades. The AUD could see a deeper drop against Sterling as Brexit optimism is boding well for the British currency.
Source : FX Street