Audusd Declines For The Fifth Day

Audusd Declines For The Fifth Day by Emily Clark last updated on November 24, 2023

AUD/USD Declines For The Fifth Day In A Row Amid Slowdown Fears

The AUD/USD pair has continued its bearish trend for the 5th day in a row as fears about a full-fledged global slowdown have increased tremendously.

The recent comments from the Fed chair as well as the IMF have further highlighted the risks faced by the global economy.

DXY Trades Near 105.80

The S&P 500 index opened on a positive note as the investor's appetite for risk has started to improve. Elsewhere, the DYX appeared to be consolidating its gains and was seen trading at 105.80. However, the US Dollar index has failed to extend its recent recovery wave as the focus is now on October's inflation data.

The highlight is most definitely the comments from Jerome Powell, who isn't happy about the current monetary policy. According to him, the monetary policy of the USA isn't enough to achieve the 2% inflation target within the given timeframe.

Another thing that's going on in the markets is that it will be difficult for the Fed to control inflation through the current policy of interest rates. To strengthen the case, the experts cite the resilience shown by the US economy.

For starters, the performance of the US economy is mainly driven by the labor market and consumer spending. Both of these factors will make it difficult to bring down the inflation towards the 2% target.

On the AUD side, the MPS (Monetary Policy Statement) was issued by the RBA. As per the report contents, any further rate hikes and tightening measures will depend on the data coming from Australia.

The Reserve Bank of Australia also pointed out the trend of persistence in Australia's inflation. The RBA believes that inflation will likely touch 4.5% this year, and by the year 2024, inflation will go down to 3.5%.

By the 2025's end, the inflation will go down even further and reach 3.0%, which will still be +1.0% higher than the 2% target.

On the AUD/USD daily chart, the 20 SMA can be seen near 0.6369, while the 100 SMA is seen near 0.65.