Australian Dollar tests 0.68 as Fed hawks drive USD to 19-month high
The Australian Dollar extended its losses against the US Dollar on Thursday, down 0.67% even though US jobs data was slightly softer than expected, but the hawkish camp at the Federal Reserve (Fed) provided a lifeline to the Greenback, which reached 19-month highs.
On Thursday, the Australian Dollar (AUD) hit a low of 0.6800 against the US Dollar (USD), marking a 0.67% decline. Despite slightly softer-than-expected US job data, the hawkish stance of Federal Reserve officials helped the Greenback reach its 19-month high. The US Dollar Index (DXY) peaked at 103.24 due to market expectations of a 25-basis-point interest rate hike by the Fed in December.
Fed officials, including Beth Hammack, Austan Goolsbee, and Mary Daly, all expressed a moderate hawkish sentiment. USD strength was driven by an 87% probability of a 0.25% rate increase. Meanwhile, US initial jobless claims rose to 200K, while continuing claims fell slightly. In Australia, economic activity remains subdued, with the Reserve Bank of Australia's forthcoming minutes and Governor Michelle Bullock's speech on November 17 providing further insight.
In the technical analysis, AUD/USD hovers just above the oversold relative strength index, while resistance levels, such as the triple simple moving average around 0.7020, have yet to be breached.
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