Audusd Closes The Week In Red

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Audusd Closes The Week In Red

AUD/USD Closes The Week In Red After RBA's Rate Hike

The AUD/USD pair lost 0.12% of its value in a single day and further deepened its weekly losses. Overall, the AUD/USD moved from 0.6522 (weekly high) to around 0.6338 within the span of a single week.

Now, the Aussie pair is trading near the 0.6358 level with a bearish bias. According to experts, the actions taken by various central banks in the last week have pushed the AUD/USD lower.

RBA Introduced 25 BPS Rate Hike

In addition, the Reserve Bank of Australia (RBA) also introduced a small rate hike of 25 basis points. After the action by the RBA, the interest rate in Australia now stands at 4.35% from an earlier value of 4.10% (a change of 0.25%).

Although the RBA has introduced a rate hike, it didn't adopt a hawkish stance at its meeting. As a result of these comments, the AUD/USD turned lower and lost almost 50 pips in a single day, which is equivalent to 0.81%.

Recently, several Fed members also adopted a dovish stance, but the Fed chair decided to take a 180-degree turn. He added that there is no clarity about whether the current actions by the Fed are enough or whether more rate hikes are needed. In addition, he also acknowledged that inflation remains a problem as long as it is above 2%.

Overall, the economic backdrop has pushed the AUD/USD lower, which is totally different from last week's bullish price action.

On the Chinese side, the economy is going through deflation, which is not good at all for the Australian Dollar. After all, China is one of the largest trading partners of Australia. So, any further weakness in the Chinese economy will make it difficult for the AUD/USD to turn higher.

Looking ahead, the AUD/USD will likely reverse all of November's losses, but it will not end the bearish trend. Furthermore, the AUD/USD shows an evening star pattern, which means more consolidation is ahead for the pair.

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