Persistent selling pressure weighs on xrp pricethe Australian Dollar during Thursday's Asian trading session.
A combination of USD strength and limited Chinese stimulus measures continues to drag the currency pair lower.
Market attention remains focused on the upcoming US inflation figures scheduled for release later today.
The Australian Dollar maintains its bearish momentum as Thursday's trading session progresses. Several interconnected factors contribute to this downward movement, with the US Dollar's recent strength playing a significant role. Growing market expectations of potential Federal Reserve rate adjustments in November have bolstered the greenback, creating headwinds for the Aussie. Meanwhile, developments in China - Australia's crucial trading partner - continue to influence currency valuations, as recent economic stimulus measures from Beijing failed to meet investor expectations.
All eyes now turn to the imminent release of US inflation data, which could potentially reshape current market dynamics. Economists anticipate the September CPI report to show a 2.3% annual increase in headline inflation, with core prices expected to rise 3.2% year-over-year. Should these figures come in below projections, market participants might interpret this as increasing the likelihood of more aggressive monetary policy easing from the Fed, potentially altering the current AUD/USD trajectory.
Market Drivers: Understanding the Aussie's Current Weakness
Recent minutes from the Reserve Bank of Australia's September meeting revealed policymakers' cautious stance, with no immediate plans for rate adjustments. The central bank appears focused on maintaining flexibility, closely monitoring economic indicators to gauge whether anticipated second-half improvements materialize.
Analysts from ANZ provided additional context, noting: "Current policy settings suggest the possibility of a shift to neutral by year-end, potentially followed by easing measures in early 2025. Our projections continue to anticipate initial rate reductions commencing February next year."
Broader economic concerns also factor into the equation, with the World Bank's latest projections indicating a slowdown in Chinese economic growth from 4.8% this year to 4.3% in 2025. These forecasts carry particular significance for Australia given the close economic ties between the two nations.
Federal Reserve officials have contributed to the evolving monetary policy narrative, with San Francisco Fed President Mary Daly suggesting that one or two additional rate reductions this year remain plausible if economic conditions develop as anticipated. Similarly, Boston Fed President Susan Collins noted weakening inflation trends could justify further policy easing.
Market pricing currently reflects approximately 80% probability of a 25 basis point Fed rate cut in November, a significant increase from just 31% last week according to CME FedWatch data.
Technical Perspective: AUD/USD Nearing Critical Juncture
From a technical standpoint, the Australian Dollar's position appears increasingly precarious. The currency pair currently tests important support levels, hovering near the lower boundary of its ascending trend channel while simultaneously approaching the psychologically significant 100-day moving average.
Several technical indicators suggest potential for continued weakness, including the 14-day Relative Strength Index remaining below the neutral 50 level at 41.20. A decisive break below current support around 0.6700 could accelerate downward momentum, with subsequent targets emerging near September's low of 0.6622.
Conversely, resistance levels begin with the September 6 high of 0.6767, followed by additional barriers at 0.6823 (August 29 peak) and 0.6942 (September 30 high). Market participants will closely watch price action around these levels for indications of potential trend reversals or continuation patterns.
