Dollar surge intensifies tech selloff, hits AUD to 2-month low

On June 23, the US dollar strengthened sharply, coinciding with heavy losses in technology shares. The Nasdaq 100 fell 3.3%, and the S&P 500 declined 1.4% to finish at 7,365, closing below its 20-day moving average. The Dow Jones Industrial Average was almost unchanged, supported by gains in defensive health care stocks.

The US Dollar Index rose past long-running range barriers as flows moved into the greenback. The Australian dollar dropped 1.2% to 0.6916, a two-month low from the May 13 high of 0.7272. Hourly momentum indicators on AUD/USD showed a bullish divergence in oversold territory, a short-term signal that can precede a minor corrective rebound. Short-term resistance sits at 0.6960, with immediate supports at 0.6900 and a cluster near 0.6876/0.6863 close to the 200-day moving average. An hourly close above 0.6960 would open a path to 0.6985 and 0.7020.

The British pound weakened 0.4% to 1.3203, trading near a three-month low of 1.3160 as markets awaited policy plans from the new UK prime minister. The Japanese yen remained near the 161.95 level often cited as an intervention threshold.

In fixed income, selling concentrated in short-duration maturities. The two-year US Treasury yield held around 4.20%, while the 10-year yield traded at about 4.50%, above its 20-day moving average of 4.49% for a second straight session.

Commodity markets fell alongside equities. Front-month Brent crude settled at $76.73 a barrel, down 1.5%, and WTI closed at $73.05 a barrel, down 1.4%; both remained above their 200-day moving averages. Spot gold fell to $4,110 per ounce, near the June 11 low of $4,024 per ounce.

Market participants noted rising risk aversion and technical breakouts as drivers of the cross-asset moves. Traders watched for any short-term corrective price action in risk assets and in the Australian dollar, while fixed-income trends and central bank communications were listed as key variables for the dollar's next direction.