Australian Dollar softens as risk-off mood meets FOMC countdown
The Aussie Dollar loses 0.11% against the Greenback on Tuesday as risk appetite remains negative amid calls from AI company CEOs to slow development, while the FOMC monetary policy meeting looms. Expectations for a Fed rate hike undermine the AUD/USD, which trades at 0.7130.
The Australian Dollar slipped 0.11% against the US Dollar on Tuesday, amid a risk-averse mood and the looming Federal Reserve's monetary policy meeting. The AUD/USD pair traded at 0.7130, slipping below the cluster of simple moving averages (SMA) around 0.7074 and within a sequence of upward-sloping trend-line supports. The US Dollar Index (DXY) rose 0.15% to 99.61, while US equity indices closed in the red.
Geopolitical events, such as Saudi Arabia notifying EU oil refiners of shipment delays due to Houthis attacks, contributed to higher energy prices. The US economic calendar included the ADP Employment Change 4-week average, which exceeded previous week's revised figures, and the New York Fed Empire State Manufacturing Index that declined to 7.6.
The market is anticipating a 25-basis-point rate hike from the Fed, along with updates to the Summary of Economic Projections (SEP) and Fed Chair Kevin Warsh's press conference. Australia's economic docket is empty, but traders will focus on the Fed's decision. The Reserve Bank of Australia (RBA) Governor Michelle Bullock is scheduled to deliver a speech on September 17.
In technical analysis, AUD/USD trades at 0.7130, holding above the SMA cluster at 0.7074 and within the broader ascending trend-line supports, suggesting a still constructive underlying tone despite the recent pullback. Traders will be closely watching this pair, awaiting the Fed's decision and a speech by RBA Governor Michelle Bullock.
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