Australian Dollar Strengthens As US Dollar Slips On Rising Debt Concerns
The Australian Dollar (AUD) continued to strengthen against the US Dollar (USD) on Monday (26/05), marking a fresh six-month high. The AUD/USD pair found support as the US Dollar remained under downward pressure amid rising uncertainty surrounding the US (US) economy.
The AUD’s gains could be tempered by dovish sentiment surrounding the Reserve Bank of Australia’s (RBA) policy outlook. Following last week’s 25 basis point interest rate cut by the RBA, Governor Michele Bullock said the central bank is prepared to take additional action if the economic outlook deteriorates sharply, raising the prospect of future rate cuts.
The Australian Dollar found support from renewed optimism surrounding a 90-day US-China trade truce and hopes for further trade deals with other countries. However, the Reserve Bank of Australia will closely monitor further developments in the US-China trade negotiations, as China is Australia’s main trading partner.
Source: FXStreet