Australian Dollar tumbles amid soaring US yields, ahead of jobs data
The Aussie Dollar stumbles over 1% against the US Dollar on Wednesday as US Treasury yields soar, with the US 5- and 10-year T-note yields surpassing the 5% threshold amid investor confidence in further Federal Reserve tightening. The AUD/USD trades at 0.7039 after peaking at 0.7118.
The Australian Dollar experienced a significant decline against the US Dollar on Wednesday, falling by over 1% amid the surge in US Treasury yields. The US 5- and 10-year T-note yields surpassed the 5% threshold, driven by investor confidence in further Federal Reserve tightening. The AUD/USD rate traded at 0.7039, after peaking at 0.7118.
Rising global bond yields, particularly US yields, contributed to the bearish sentiment in the market. The US 5-year Treasury yield rose by 17 basis points to 4.99%, while the 10-year T-note surged by 15.5 basis points to 5.11%, reaching its highest level since 2007. The US Dollar Index (DXY) increased by 0.57% to 101.25, reflecting the strengthened US Dollar.
The September manufacturing PMI in the US showed resilience in the economy, with S&P Global Manufacturing PMI at 57 and the services index at 58.7, both surpassing expectations. Fed Chair Kevin Warsh highlighted the manufacturing sector's strength during a press conference. Fed Governor Michael Barr suggested that further rate hikes might be necessary to achieve the central bank's 2% inflation target.
In Australia, the S&P Global Composite PMI fell from 52.7 to 50.8, while the Manufacturing PMI contracted and the Services index slowed, impacting the economy. The upcoming jobs data in Australia is expected to improve from a loss of 15.8K to a gain of 20K in August, with the Unemployment Rate remaining steady at 4.5%. The AUD/USD is trading at 0.7041, displaying a bearish short-term bias as it falls below the triple simple moving average (SMA) cluster around 0.7092.
The pair faces resistance at the triple SMA level near 0.7092 and a significant horizontal barrier at 0.7198, which could limit any upward movements. Downside support is provided by the tested rising trend line at 0.7040, with subsequent upward trend-line supports forming just below the current price, indicating a gradual base formation rather than a single, precise level.
A clear break below this pivot zone could lead to a deeper decline in the Australian Dollar within a broader bearish trend.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
