September 27, 2022 12:00 AM ET
By: AnalysisWatch
The AUD/USD pair is experiencing a slight correction after reaching a high of 0.6495 in early Tokyo trading. Earlier, the asset recovered firmly after falling to almost 0.6437 as the risk-off profile was strengthened. As investors have started to suppress negative market sentiment, commodity-related currencies recorded a retracement. Lower approval of U.S. durable goods new orders also weakened the U.S. dollar index (DXY).
Meanwhile, a combination of news about China's growth forecasts and a conversation between Australian Prime Minister Anthony Albanese and U.S. Vice President Kamala Harris pushed Australian investors to the sidelines.
As reported by the Wall Street Journal, the World Bank has lowered its growth forecasts for China in light of its prolonged zero-tolerance policy on COVID-19 and the housing crisis. COVID-19 restrictions suspended the free movement of people, materials, and machinery, leading to a decline in manufacturing output. The housing crisis led to a sharp drop in demand for base metals, steel, and other construction materials. The WSJ added that developing economies in East Asia would grow faster than China this year for the first time since 1990.
Australian Ambassador Albanese congratulated US Senator Harris on the passage of the Inflation Control Act. This came after US President Harris announced that the US economy would cooperate with Australia on peace and security in the Indo-Pacific region.
In today's session, US durable goods data will be in the spotlight. The economic data is expected to decline 1.1% as individuals hold back their demand for durable goods in the face of skyrocketing core price increases and rising interest rates. If the results fall short of expectations, the DXY will go into correction mode