The AUD/USD dropped further during the American session amid risk aversion and a stronger greenback. The pair is trading at 0.6540, the lowest level in more than two years, under pressure while the DXY printed fresh 20-year highs near 113.00.
The dollar is the only king in town on Friday. Commodities are plunging, including a 6% slide in crude oil prices and a 4% decline in silver. Sovereign bonds are also lower, only finding some demand as investors fly to quality. In Wall Street, the Dow Jones is falling by 1.51% and the S&P 500 drops by 1.76%.
Fears about a global recession and higher interest rate continue to weigh on market sentiment that affects emerging and commodity currencies. The US dollar not only benefits from risk aversion on Friday but also from US economic data. The S&P Global PMI preliminary September reading showed a much larger than expected rebound, particularly in the service sector that boosted the greenback further.
The 100-pip slide on Friday in AUD/USD, adds to weekly losses that now are near 200 pips. The pair is about to post the lowest weekly close since May 2020. Despite oversold readings, the negative momentum remains firm.
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