Audusd Drops On Neutral Guidance

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Audusd Drops On Neutral Guidance

Aud/Usd Drops To 0.6500 On Rba's Neutral Guidance

Due to the market's downbeat sentiment, the AUD/USD pair is going through an intense sell-off wave. The decline in the market sentiment has also lessened the appeal of riskier assets such as the AUD/USD.

The downbeat sentiment in the market has sent the AUD/USD pair towards the 0.6500 support. Amidst all of this, the greenback has also gained strength as the uncertainty regarding the Fed's rate cut continues to grow.

S&Amp;Amp;P 500 Futures Turn Negative

In the US stock markets, the S&P 500 futures are already down as there's a growing chance that no rate cut will come anytime soon. In a sense, the decline in the S&P 500 futures also highlights that the risk appetite has weakened.

While the US stock market is showing weakness, the DXY continues to enjoy its 4th winning session in a row and can be seen near 104.00.

Additionally, the 10-year bond yield is near 4.32% with a little selling, but the long-trend is still bullish as the chances of a rate cut in June have also gone down due to hot inflation.

Meanwhile, the key catalyst for the AUD/USD is the Fed's interest rate decision, which is due tomorrow. As per the FedWatch tool, the interest rate will remain the same, making it the 5th time!

That's why investors are now focusing on the economic projection and the dot plot forecast from the Federal Reserve.

If we look at the Australian side, the RBA decided to go with neutral guidance and kept the interest rate at 4.35%. Also the RBA governor also passed a comment on how the central bank has yet to announce its victory against inflation.

He added that the RBA needs more data to gain confidence that inflation has indeed come down and to even think about a possible rate. After the news, the AUD/USD turned negative and sent the bulls to seek refuge near the 0.6500 support zone.

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