The AUD/USD pair experiences a significant decline, reaching a four-week low.
The Australian dollar, in tandem with the US dollar, has seen a notable drop, with the current AUD/USD exchange rate at 0.6612.
Contributing to this decline is the pessimistic outlook for China, a key factor for Australia. Forecasts at the Davos forum indicate a modest economic growth projection for China in 2024. These cautious expectations stem from the ongoing crisis in the real estate sector, weak domestic consumption, and deteriorating conditions in industrial production.
Adding to the downward pressure, China's central bank opted to keep the key interest rate unchanged on Monday, disappointing investors who had anticipated the first reduction since August. Given Australia's strong economic ties with China, any negative developments in China have a pronounced impact on Australian markets.
Simultaneously, the strengthening position of the US dollar is exerting noticeable pressure on the Aussie. Investors are currently leaning towards safe assets, steering clear of risks.