A broad-based US Dollar rally that saw it climb 1.63% against a basket of currencies pressured the Aussie to fall 1.68% to 0.6485 from 0.6600 yesterday. The Battler abandoned its pivot around 0.66 cents as US stocks and bonds rebounded off sharp 2008-like falls. The benchmark US 10-year yield bounced back to 0.80% from 0.55%. In contrast, Australia’s 10-year bond rate was up 18 basis points to 0.79% (0.61% yesterday).
AUD/USD dropped to an overnight low at 0.64626 before rallying back to 0.6500 in late New York, settling at 0.6485 at the close. The Aussie remains under pressure on the broad USD strength. Immediate support lies at 0.6460 followed by 0.6430 which is key. Immediate resistance can be found at 0.6520 followed by 0.6560.
The Aussie will be dictated from moves by the broader US Dollar. While the short-term pressure is on the Battler, expect the 0.6460 level to hold today. It is too early to call a bottom for the Greenback. Look to trade a likely 0.6470-0.6540 range today in the Aussie. Prefer to buy dips.
