RBA’ Lowe jawbones AUD/USD to 3-1/2 week low

AUD/USD fell to a 3-1/2 week low of 0.7840 after RBA Governor Lowe said a weaker AUD would help Australia reach full employment more quickly. 

Risk-off weighs, ignores rally in gold

The risk aversion in the financial markets is hurting the Aussie and other high yielders. Meanwhile, the American dollar is having a good time, given the currency was offered across the board during the risk-on rally seen from mid April to July end. 

Aussie bears need to be cautious as the flight to safety has boosted demand for gold; one of Australia’s key exports. 

The currency pair was last seen trading around 0.7850. The 10-yr Aussie government bond yield was down close to 7 basis points [bps]. Its US counterpart was down 4 bps. 

Focus on US CPI

The spot may find relief if the US July CPI, due at 12:30 GMT, prints below estimates. The US PPI data released yesterday has already shown a lack of inflationary pressures in the pipeline. 

AUD/USD Technical Levels

A break below 0.7831 [23.6% Fib R of 2011 high - 2016 low] would expose 0.7809 [4-hour 200-MA] and 0.7784 [38.2% Fib R of 0.7328-0.8066]. On the higher side, breach of 5-DMA hurdle of 0.7886 would open up upside towards 0.7924 [10-DMA] and 0.7980 [Aug 4 high].