- AUD/USD feels the weight of the Chinese ban on Australian imports.
- RBA’s expected dovishness weakens AUD.
- The US elections might arrest the pair’s slide for now.
AUD/USD is under selling pressure after China banned the import of Australian timber from Queensland, over the weekend; rumours are afloat about another round of restrictions on Australian goods like copper ore, copper concentrate, and sugar by China.
The pair was trading near the lower end of its daily range, also the three-month bottom, today. The trade restrictions cancelled the effect of upbeat Chinese PMI on the Australian dollar as the case of additional easing from the Reserve Bank of Australia gained strength after the ban.
The central bank will announce tomorrow its latest monetary policy update, during the Asian session. Traders have already discounted a cut in the interest rate and will be eyeing for hints in the policy statement narration.
The US dollar is in demand due to the unabated coronavirus cases and the resultant lockdown, especially in Europe. Nevertheless, the overhang of the presidential elections will not encourage traders to place aggressive bets in the dollar.
AUD/USD bears are better off to wait for further confirmation before positioning for more fall in the pair. However, another fall in the AUD/USD is highly probable in the near-term.
Market participants will await the US ISM Manufacturing PMI ahead along with snippets regarding the pandemic as well as the presidential elections to provide some direction in the short term.