AUD/USD dips on risk-off mood, RBNZ's dovish pivot

Source Fxstreet
  • AUD/USD falls 0.73% as RBNZ's cautious rate decision overshadows Australia's inflation report.
  • US economic data reveals growth, with GDP at 3.2% YoY, influencing global market sentiment.
  • Upcoming Australian Retail Sales expected to show recovery, with market forecasting a 1.5% rise MoM.

The Australian Dollar (AUD) dropped 0.73%, against the US Dollar (USD) on Wednesday/s session, courtesy of a dovish hold by the Reserve Bank of New Zealand (RBNZ), which followed a solid inflation report from Australia. As the Asian session begins, the AUD/USD trades at 0.6496, virtually unchanged.

AUD/USD retreats as investors weigh RBNZ's rate hold and anticipate Australian retail sales data

Wall Street finished with losses, as depicted by the S&P 500, down 0.30%. Economic data from the United States (US) showed the US economy is growing above the trend needed to drive inflation toward the US Federal Reserve's 2% target. the Gross Domestic Product (GDP) for the last quarter of 2023 grew by 3.2% YoY, below estimates of 3.3% and Q3 4.9%.

Besides that, Fed speakers stuck to their cautious stance, with Boston Fed President Susan Collins and New York Fed President John Williams supporting rate cuts later in the year. Collins noted that the road to achieving the inflation target would be “bumpy,” Williams said, “We still have a ways to go on the journey to sustained 2% inflation.”

Aside from this, Australian inflation data adopted a back seat as the RBNZ grabbed the attention with its decision to hold rates at 5.50% while removing hawkish comments from the monetary policy statement. AUD/USD and NZD/USD traders gathered more signals from RBNZ Governor Adrian Orr's Q&A session. He said there were discussions about a rate hike. Still, the strong consensus aimed to keep the current level of tightening, adding that some variables revealed that monetary policy is working.

What to watch?

Ahead of the Asian session, the Aussie’s economic docket will feature Retail Sales data, with the consensus expecting a jump from -2.7% to 1.5% MoM in January.

AUD/USD Price Analysis: Technical outlook

The AUD/USD pair shifted bearish bias after hovering around a narrow range of 0.6520-0.6580 and failing to crack the 200-day Moving Average (DMA) at 0.6559. that, along with fundamental reasons, pushed the spot price below the 0.6500 figure and extended its losses to a 9-day low. A fall below that area would expose the February 13 low of 0.6442, which, once cleared, could pave the way to test 0.6400. Conversely, if buyers reclaim 0.6500, they must regain the 100-DMA at 0.6533.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold declines as Trump scraps Iran memorandum, markets await Fed minutesGold (XAU/USD) trades around $4,050 on Wednesday, down 1.40% on the day at the time of writing, as investors favor the US Dollar (USD) following a fresh deterioration in tensions between the United States (US) and Iran.
Author  FXStreet
12 hours ago
Gold (XAU/USD) trades around $4,050 on Wednesday, down 1.40% on the day at the time of writing, as investors favor the US Dollar (USD) following a fresh deterioration in tensions between the United States (US) and Iran.
placeholder
WTI Crude Oil Price Forecast: US-Iran Situation Worsens, Oil Prices Expected to Rise to $80 As of the Asian session on July 8, WTI ( USOIL) crude oil prices rose to around $72, rebounding significantly from previous trading sessions. From a technical perspective, oil prices had
Author  TradingKey
12 hours ago
As of the Asian session on July 8, WTI ( USOIL) crude oil prices rose to around $72, rebounding significantly from previous trading sessions. From a technical perspective, oil prices had
placeholder
Trump Says US-Iran Temporary Ceasefire Agreement Has Ended, WTI Crude Oil Rises Over 6%US President Trump stated at the NATO annual summit on July 8 that he believes the US-Iran memorandum of understanding is "over." This means the temporary ceasefire state between the two
Author  TradingKey
12 hours ago
US President Trump stated at the NATO annual summit on July 8 that he believes the US-Iran memorandum of understanding is "over." This means the temporary ceasefire state between the two
placeholder
US President Trump: I think MoU with Iran is overUnited States (US) President Donald Trump said during European trading hours on Wednesday that the memorandum of understanding (MoU) with Iran, aimed at ending the war in the Middle East, is over.
Author  FXStreet
13 hours ago
United States (US) President Donald Trump said during European trading hours on Wednesday that the memorandum of understanding (MoU) with Iran, aimed at ending the war in the Middle East, is over.
placeholder
WTI spikes following fresh US airstrikes on IranWest Texas Intermediate (WTI) oil price continues to advance after registering nearly 5% gains in the previous day, trading around $72.20 per barrel during the Asian hours on Wednesday.
Author  FXStreet
21 hours ago
West Texas Intermediate (WTI) oil price continues to advance after registering nearly 5% gains in the previous day, trading around $72.20 per barrel during the Asian hours on Wednesday.
Related Instrument
goTop
quote