- The dollar is unstoppable amid risk aversion and positive US economic data.
- US yields moderate gains as Wall Street continues to slide.
- AUD/USD extends weekly losses and trades at its lowest since May 202.
The AUD/USD continued to fall during the American session amid risk aversion and the strengthening of the dollar. The pair is trading at 0.6540, the lowest level in more than two years, under pressure, while the DXY hit new all-time highs near 113.00.
All fallen…
The dollar is the only king in town on Friday. Commodities plunge, including a 6% drop in crude oil prices and a 4% decline in silver. Government bonds are also down, finding only some demand as investors flock to quality. On Wall Street, the Dow Jones falls 1.51% and the SP500 1.76%.
Fears of a global recession and rising interest rates continue to weigh on market sentiment affecting emerging and commodity currencies. The dollar is not only benefiting from risk aversion on Friday, but also from US economic data. September’s preliminary reading of the S&P Global PMI showed a much larger-than-expected rebound, especially in the services sector, which further boosted the dollar.
Friday’s 100 point drop in AUD/USD adds to weekly losses now approaching 200 points. The pair is about to post the lowest weekly close since May 2020. Despite the oversold readings, the negative momentum remains firm.
Technical levels
Source: Fx Street
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