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MTrading Team • 2023-05-09

AUDUSD eases on downbeat data, cautious mood

AUDUSD eases on downbeat data, cautious mood

Market sentiment remains downbeat as US default fears escalate ahead of White House talks on the debt ceiling. Adding strength to the risk-off mood are the banking woes and expectations that the Fed still has some room before hitting the policy pivot limit.

With this, the US Dollar manages to remain firmer for the second consecutive day while the riskier assets like Commodities, Antipodeans and shares grind lower. That said, Gold and Crude oil fade the latest rebound while the risk-barometer AUDUSD prints the first daily loss in seven.

Apart from the risk appetite downbeat Aussie Retail Sales and China trade numbers also weigh on the Aussie pair price. The same challenge NZDUSD bulls while EURUSD and GBPUSD grind higher as the US Dollar struggle to find acceptance ahead of Wednesday’s US inflation.

Cryptocurrencies also remain depressed amid sour sentiment, as well as due to receding global liquidity crunch as central bankers stay hawkish despite recession woes.

Following are the latest moves of the key assets:

  • Brent oil prints the first daily loss in four near $76.30 by the press time.
  • Gold price struggles to defend two-day gains around $2,025 at the latest.
  • USD Index rises for the second consecutive day but lacks follow-through near 101.50.
  • Wall Street closed mixed and so did the Asia-Pacific shares. That said, equities in Europe and the UK print mild losses during the initial hour.
  • BTCUSD and ETHUSD drop for the fourth consecutive day to $27,650 and $1,850 as we write.
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Risk profile weakens ahead of key data/events

Even as the US policymakers are optimistic about reaching the debt ceiling deal, markets don’t trust them as the June deadline has some days in between and there’s a wide difference among the top-tier diplomats of the White House.

Additionally, the Fed’s banking loan report highlights the credit crunch and fears among investors, which in turn highlights grim conditions in the market even if central bankers keep pushing back recession concerns.

Apart from the key risk catalysts, downbeat Aussie Q1 Retail Sales and China’s slower Export growth also weigh on the previous optimism.

On the same line is the anxiety as full markets return after holidays in the UK and France on Monday.

  • Strong buy: Gold
  • Strong sell: ETHUSD, GBPUSD
  • Buy: USD Index, USDCAD, Nasdaq, EURUSD

White House talks on debt ceiling are the key

Although the economic calendar has nothing major to watch on Tuesday, the US diplomats’ talks to avoid the looming default fears will be crucial as US Treasury Secretary terms it as “catastrophic”. Apart from that, the UK’s return and looming hawkish concerns about BOE and ECB can also allow traders to reverse the latest corrective bounce of the US Dollar.

May the trading luck be with you!