The Australian dollar depreciated for two consecutive days as the US dollar strengthened following the Feds FOMC meeting. The AUD is attracting downward pressure after the ASX 200 Index declined this week. The equity markets in Australia slumped delivering losses that undermined the AUD. On the other hand, the US dollar experienced a robust week outperforming all leading currencies across the globe.
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The US dollar not only beat leading currencies, but came out on top of gold, crude and Brent oil, and other commodities. Currency investors who took an entry position into the US dollar made stellar profits as other investments headed south.
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Currency: Why Is The Australian Dollar Falling Against the US Dollar?
The Australian unemployment rate increased by 3.7% while the US unemployment rate decreased below the 4% mark. The unemployment rate in the US remained under 4% for 25 consecutive months, which is the longest streak since the 1960s. Therefore, the Australian dollar is experiencing macroeconomic pressure while the US dollar is cooling off.
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Additionally, the US economy saw a glimmer of hope after the S&P Global Manufacturing PMI performed better than expected rate. The PMI rose 52.5 against the expected 51.7 boosting the US dollar’s prospects.
The manufacturing and export industry in the US is seeing demand and the positivity is reflected on the dollar. The opposite is occurring in Australia as its manufacturing is below the 6% mark of its entire GDP.
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The DXY Index, which measures the US dollar’s performance climbed above the 104 mark reaching a high of 104.23. That’s a surge of 0.70% in the day’s trade rising by 0.72 points.
Moreover, currency investors purchased the US dollar at every dip this year cementing its resistance during the downturn. The development helped the US dollar pullback stronger after each dip trouncing the Australian dollar in the currency charts.