AUD/USD Focuses on 0.7000 During Risk-off Mood, and Australian  Employment Data
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AUD/USD Focuses on 0.7000 During Risk-off Mood, and Australian  Employment Data

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Azeez Mustapha

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AUD/USD gets to lower price levels around 0.7030, after its renews its 3-weeks low. Bad news from China combined with risk-avoiding moves supported the downward forces. This caused the AUD/USD to drop for 4-days straight.

However, the AUD/USD pairs risk gauge losses can be related to rising anxieties of rising US inflation and aggression of the Fed. The market feelings grew worse, following the release of the Consumer Price Index which increased to 8.6% against the 8.3% anticipated. Also, the main Consumer Price Index climbed to 6.0% against the anticipated reduction of 5.6% from 6.2%.

China experienced an increase in coronavirus infection during the last two days. This reinstated some activity restrictions and public testing for the virus.

AUD/USD Focuses on 0.7000 During Risk-off Mood, and Australian  Employment Data

Addition Factor Affecting AUD/USD Price

Another thing affecting the AUD/USD and market feelings is the struggle between USA and China over Taiwan. Due to this China’s Defense Minister disclosed that China’s relationship with the US is at a point of breakage. Also, China’s policymakers announced their readiness to fight against Taiwan’s secession from China.

In contrast to the background, Wall Street crashed while US Treasury yield moved up. This consequently pushed the demand for the USD. In addition, the S&P 500 dipped by 1% while the US ten years Treasury yield stayed largely the same: about 3.16%.

Furthermore, from the AUD front, vacations in Australia will likely restrain the AUD/USD price action. Also, from the USD side, striving to avoid risk will keep exerting downward forces on the pair. Finally, the Federal Reserve decision and May’s Australian employment data, coming up in two and three days. These will be vital for AUD/USD traders to monitor.

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