Being the worst performer on Forex this week, the Australian dollar was extending losses against the US dollar in the Asian trade. In the early trade, the AUD/USD pair slumped by 0.6% to a 4-month low of about 0.7380. Later, this pair corrected upwards to 0.7389. Analysts expect the Aussie to decline for long as Australia's economy depends greatly on the economic health of its major trade partner. Experts foresee a slowdown in China's economy citing recent downbeat fundamental data. This argument made the Reserve Bank of Australia express the dovish stance on further monetary policy. In the monetary policy statement released overnight, the central bank dropped a hint that the official cash rate would be retained unchanged in the short-term.
The officials pointed to the soft labor market as the main argument for putting the monetary policy on hold. Besides the Australian dollar is facing massive sell-offs, being a highly risky asset. Meanwhile, investors are sitting on the sidelines ahead of the presidential election in France, so they prefer to finish the week with safe haven assets like the US dollar or Japanese yen. The USD/JPY pair failed to break through the resistance level of 113.00. Now the pair is in the correction phase. Analysts expect the pair to breach support at 111.70 as below this level traders will resume long positions on the US dollar betting on its strength. Speaking about the most popular pair on forex, analysts assume that the US dollar to lose ground against the euro today.