AUD/USD struggles to capitalize on the previous day's bounce from the vicinity of the year-to-date low. Economists at HSBC expect the pair to edge lower over the coming weeks.

AUD will likely benefit less from the terms of trade channel

“We look for downside in the AUD against the USD over the coming weeks and medium-term.” 

“Vulnerable risk sentiment amid tighter global financial conditions and a worsening global growth outlook is likely to weigh on the AUD.” 

“The AUD may also face asymmetric downside risks around the Reserve Bank of Australia’s (RBA) meeting in October, should the market expect the RBA to pivot earlier.” 

“The AUD will likely benefit less from the terms of trade channel, as the current strength in commodity prices has been driven more by supply constraints than by robust demand expectations, which could be detrimental to global growth and delay a material pick-up in business investment.”