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MTrading Team • 2023-02-27

AUDUSD bears poke 2023 bottom amid broad US Dollar strength, cautious mood

AUDUSD bears poke 2023 bottom amid broad US Dollar strength, cautious mood

Global markets remain dicey after a huge push of risk-off mood and hawkish Fed bets propelled the US Dollar buying in the last week. The market’s indecision could also be linked to the cautious mood ahead of the second-tier US data, as well as mixed geopolitical headlines.

With this, the US Dollar copies the moves of the Treasury bond yields to seesaw around multi-day tops while equities in the Asia-Pacific zone grind lower amid fears of higher rates. Further, commodities remain pressured and so do the risk barometer AUDUSD pair.

USDJPY bucks the trend and drops 0.15% while EURUSD and USDCAD remain sidelined. Prices of Gold stay indecisive but Crude oil and Silver remain pressured.

Further, Cryptocurrencies also fail to cheer industry-positive headlines amid a firmer US Dollar and reverse the previous day’s solid gains.

Following are the latest moves of the key assets:

  • Brent oil snaps three-day uptrend near $82.70, down 0.75% intraday at the latest.
  • Gold remains indecisive near $1,810, after four-day downtrend to a two-month low.
  • USD Index seesaws around the highest levels in seven weeks.
  • Wall Street closed in the red and weighed on the equities in the Asia-Pacific region. However, the shares in Europe and the UK remain directionless at the latest.
  • BTCUSD and ETHUSD print mild losses around $23,500 and $1,640 as we write.
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US Dollar ignores sluggish markets to stay on the front foot

Although traders sought more clues to extend the previous day’s risk aversion, which in turn restricted US Treasury bond yields, the US Dollar seesaws around the seven-week high marked on Friday. The reason could be linked to the strong data suggesting higher consumption and inflation, which in turn fuelled rate hike concerns.

Other than the US concerns, downbeat NZ Retail Sales and fears of more pain for the bloc, due to the Ukraine-Russia war, also weigh on the market sentiment.

Furthermore, the chatter surrounding no acceptance of the new Brexit deal, despite UK PM Sunak’s hard efforts, keeps GBPUSD depressed even as hopes of a softer landing keep the Cable buyers hopeful. Elsewhere, AUDUSD fails to cheer hawkish RBA concerns as traders fear the Aussie recession.

It should be noted that the doubts about China’s recovery hopes and escalating pessimism surrounding Russia join hopes of higher Fed rates to weigh Gold prices. Moving on, Crude oil also remains pressured and fails to cheer recent challenges to energy supplies, mainly from Russia, as the strong US dollar and higher bank rates loom.

Talking about the BTCUSD and ETHUSD, the news of crypto mining difficulties and the Shanghai hard fork allowed the key e-currencies to remain firmer during the weekend before tracing some gains on the US Dollar strength and regulatory fears.

  • Strong buy: USDJPY
  • Strong sell: ETHUSD, GBPUSD
  • Buy: USD Index, USDCAD, Nasdaq, EURUSD
  • Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

US Durable Goods Orders eyed

While the risk-off mood can keep the US Dollar on the front foot, the US Durable Goods Orders for January will be eyed for intermediate directions as the consensus figure suggests a fall.

May the trading luck be with you!