AUD Tumbles Below 0.70 as Dovish RBA Guidance Weighs on Currency

The Australian Dollar plummeted over 0.40% against the US Dollar on Tuesday, despite the Reserve Bank of Australia (RBA) raising interest rates to 4.60%. RBA Governor Michele Bullock's dovish comments weighed on the currency, causing it to fall below the 0.7000 threshold.

The US Dollar Index (DXY) dipped from around daily highs past 101.50 to 101.25, poised to end the day with modest gains of 0.20%. Other Fed officials were hawkish, with Governor Michael Barr stating that policy needs recalibration and further rate hikes are likely.

The US economic docket featured the Conference Board (CB) Consumer Sentiment, which fell sharply to its lowest level since early 2014, reaching 81.9, below forecasts of 89.0. Job openings fell to 7.079 million in August, indicating that the labor market is in balance.

The AUD/USD pair trades at 0.6987, extending a corrective slide after losing the 0.70 handle and moving further away from its recent highs. The near-term bias is bearish, as the pair trades below the clustered 50-, 100- and 200-day simple moving averages (SMA) around 0.7093.