AUD/USD hits fresh lows, still above 0.7100 as S&P500 drops 1%

• Risk aversion boosted the US dollar versus the Aussie.
• AUD/USD retreats from one-year highs, remains above 0.7100.

The AUD/USD pair dropped to 0.7119 after the beginning of the American session on the back of risk aversion. After the opening, Wall Street indexes spiked lower and then rebounded, pushing the pair off lows.

As of writing, AUD/USD trades at 0.7135, down 50 pips for the day while the S&P 500 falls 1%. The aussie reached on Wednesday the highest level since April 2019 at 0.7196 and started to correct lower. The move accelerated during the European session on the back of a modest USD recovery.

The US dollar lost strength, particularly versus main European currencies, and limited the decline in AUD/USD. Economic data from the US showed the economy contracted in Q2 at record levels. Also, US jobless claims rose again. The numbers added pressure to the dollar but also weighed on risk appetite.

Lower US yields are another negative factor for the greenback on Thursday. The US 10-year yield fell to 0.54%, the lowest level since March.

Technical levels