The Aussie dollar is getting smashed by most major currencies as the US posts some of its strongest results in the past 21 years.
The previous session brought a 1% drop and at time of writing it sits at 71 cents.
As you can see, it is at its lowest point since February 2016.
US PMI numbers impacting Aussie dollar
Previously we have talked about the importance of PMI reports and their effect on markets.
Well, with the September PMI numbers in for the US, it is clear that the service sector has grown at its fastest pace in 21 years.
This comes on the back of a successful renegotiation of NAFTA, now rebranded as the USMCA.
However, US bond yields are the most important factor driving down the Aussie dollar.
The benchmark 10 year notes are now at 3.18% — the highest they have been since 2011.
These yields reflect the increase in the Federal Reserve’s interest rate as well as strong employment data.
Unemployment sits at 3.8% — near an 18 year low.
Going forward, it’s looking grim for the Aussie dollar.
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