- AUD/USD declines after S&P cuts Australian credit outlook, holds rating stable at AAA.
- The shift in risk-tone adds burden onto the Aussie pair.
- Second-tier housing data awaited, pandemic headlines will be important.
With the global rating giant S&P cutting Australia’s credit outlook, AUD/USD drops below 0.6150, currently down 0.44% around 0.6142, amid Wednesday’s Asian session.
S&P cuts Australia’s outlook from stable to negative while holding the credit rating intact at AAA. The rating giant also anticipates annual growth to fall to 1.3% in the financial year 2020.
Earlier during the day, the Aussie pair failed to extend the previous two-day advances amid fresh fears of the coronavirus (COVID-19). The reason could be traced from the latest numbers from the US, Spain and the UK as well as Japan’s call for emergencies in six provinces including Tokyo.
The risk catalysts, namely the US 10-year Treasury yields and stocks, mark the recent shift in the tone with the former declining three basis points to 0.70% whereas stocks in Australia marking losses more than 2.0% by the press time.
It’s worth mentioning that US President Donald Trump’s early-day comments exerted additional downside pressure on the pair.
Traders will now keep eyes on the Aussie housing finance data for immediate direction while updates concerning COVID-19 will remain as the key driver.
Technical analysis
Sellers are likely targeting a 21-day SMA level of 0.6056 unless clearing the March-end top surrounding 0.6215.
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