AUD/USD advances after picking bids to near 0.6900, focus is on US Durable Goods Orders
|- AUD/USD is aiming to reclaim its tree-day high at 0.6960 amid a downbeat consensus for US data.
- The US private sector has become a victim of delayed response by the Fed on inflation.
- Investors have ignored the dismal performance of the Australian PMI.
The AUD/USD pair has witnessed a firmer rebound after correcting to near the critical support of 0.6900 in the early European session. The asset is advancing confidently and is expected to reclaim its three-day high above 0.6960 as the US dollar index (DXY) has trimmed its gains after facing barricades around 108.80.
The DXY is likely to remain volatile as investors are awaiting the release of the US Durable Goods Orders data. According to the preliminary estimates, the economic data could tumble to 0.6% against the prior release of 2%. Also, the dismal US Purchasing Managers Index (PMI) data released on Tuesday supports the poor forecasts for Durable Goods orders.
The investing community is aware of the fact that the foremost priority of the Federal Reserve (Fed) is to bring price stability to the economy. And, in order to address the same, the Fed has already stepped up its interest rates to 2.25-2.50% in its last four monetary policy meetings. Investors believe that the Fed has remained laggard in dealing with ramping up inflation. And, the US private sector has become a victim of the Fed's leniency. Well, the Fed is still sticking to its velocity of hiking interest rates and the market participants must not upgrade growth forecasts for a while.
On the antipodean front, aussie bulls are displaying a decent performance despite the downbeat Australian PMI numbers. The S&P Global Manufacturing PMI slipped sharply to 54.5 vs. expectations of 57.3 and the prior release of 55.7. While the Services PMI data landed lower to 49.6 against the forecasts of 54 and the former figure of 50.9.
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