Aud Is Under Pressure Commerzbank

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Aud Is Under Pressure Commerzbank

Aud Is Under Pressure, According To Commerzbank

Commerzbank analysts have recently shared their views on the Australian Dollar (AUD). According to them, the AUD is going through selling pressure on the intraday charts and is down by 0.7% against the greenback.

According to Commerzbank, the reason for the AUD weakness is China's economic woes. Additionally, the recent inflation reading in Australia was a lot lower than the forecast. This has led many to believe that the RBA will likely raise the interest rate because of the changed situation.

China'S Weakness Affects Australian Dollar (Aud)

However, the recent weakness in the Australian Dollar has little to do with inflation and more to do with China's economic woes. Almost 66% of the Australian exports fall in the commodities category, and the biggest buyer of these is China.

So, if the Chinese economy is in distress, Australian exports will take a hit. As a direct result of this, the Australian economy will also be under pressure, which will make things difficult for the Australian dollar (AUD).

Going forward, the performance of the Australian Dollar (AUD) will remain tied to the Chinese economy. If China's economy, especially the housing market, remains in distress, it will continue to affect Australian exports and the Australian Dollar (AUD).

For now, the exchange range of AUD/USD is 0.6530, with a YTD change of -4.10%. As for the performance in the last six months, it is around -0.62%. All of this hints at the fact that the AUD is under selling pressure in both the short and the long term.

However, the one wildcard that could send the AUD flying against the USD is the rate hike from the RBA. If this happens while the US Fed is lowering its policy rate, it will serve as a major trend shift in the AUD/USD. After all, the interest rate differential is still one of the major catalysts that can drive the AUD/USD market.

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