Aussie dollar drops despite new RBA rate hike
The Australian dollar fell against its major counterparts despite the RBA’s further 50 basis point rate hike overnight. The Australian dollar is under pressure following renewed tension between the United States and China after reports that Speaker of the United States House of Representatives Nancy Pelosi will visit Taiwan on Tuesday. Beijing has repeatedly warned Washington against a visit by the senior official, which would be considered a major provocation, which worries operators about a deterioration in relations between the two superpowers, which are already at an all-time low.
The Australian dollar, but also Asian risky assets have been under pressure since last night. Chinese and Japanese stock markets fell nearly 2% on Tuesday, while the New Zealand dollar closely followed the Australian dollar in its decline by also underperforming the major currencies.
The Australian dollar is also hurt by disappointing manufacturing PMI data from the previous day, which showed a further slowdown in economic activity in developed economies. JP Morgan’s global manufacturing PMI fell to its lowest level since the summer of 2020, which bodes ill for risky assets, especially cyclical assets like the euro and Australian dollar.
AUD/USD daily price chart – key levels