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Market News Commodities plummeted across the board, dragging down the Australian dollar

Commodities plummeted across the board, dragging down the Australian dollar

On November 9th, the Australian dollar has fallen more than 0.6% against the US dollar, dragged down by the drop in commodities across the board, despite the strong performance of the Australian business confidence index released during the Asian session.

Eden
2021-11-09
8088

On Tuesday (November 9), the Australian dollar fell against the US dollar from its earlier high of 0.7430, and is currently down by more than 0.6%. Although the Australian business confidence index released during the Asian session is strong, the overall decline in commodities and other factors make the Australian dollar continue Down under pressure.


The monthly rate of Australia’s NAB business confidence index rose to 21 from 13 in September, while the NAB business climate index rose from 5 to 11 in October. Local economists said that the improvement in business confidence was mainly due to the relaxation of blockade restrictions. Previously, New South Wales, the country's most populous state, lifted the blockade on October 11 (the survey data was collected from October 19 to 29. of).

The mood in Victoria and Queensland has also improved. The blockade in Victoria is about to end, and the border in Queensland should be reopened before the end of this year.

The local bank Westpac stated that “high vaccination rates have contributed to the reopening, which indicates an optimistic outlook for 2022.”

However, the data failed to boost the intraday trend of the Australian dollar, and the long-term performance was still weak. At the same time, the U.S. dollar was also under pressure. The PPI data released during the day rose 8.6% year-on-year, which was the same as last month and was slightly lower than the 8.7% expectation.

Commonwealth Bank of Australia strategists said that because the Reserve Bank of Australia’s interest rate hike expectations may be adjusted lower. The Reserve Bank of Australia predicts that inflation and wage growth will not be high enough to raise interest rates until the end of 2023 at the earliest. However, the market expects the Reserve Bank of Australia to raise interest rates starting next year.

In addition, the night trading black products plummeted across the board, and iron ore fell more than 6% to the lowest level since January 2019, further expanding the intraday decline of the Australian dollar.

If the bearish momentum does build up, and the Australian dollar falls below the November 5 low of 0.7360, it may trigger the exchange rate to fall to lower 0.7324 and 0.7300.

If the exchange rate can rise against the trend, investors need to pay attention to the resistance levels 0.7400, 0.7432 and 0.7457.

(Australian dollar against the dollar daily chart)

GMT+8 23:14, the Australian dollar was quoted at 0.7378 against the US dollar.

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