AUD/USD sees weakness to near 0.6400 ahead of Fed Powell’s speech
|- AUD/USD is likely to drop near 0.6400 after demolishing a less-confident pullback.
- A lower-than-expected decline in the demand for US Consumer Durables supported the DXY.
- The roadmap of hiking interest rates for the remaining 2022 will be keenly watched.
The AUD/USD pair displays a less-confident pullback after dropping to a fresh two-year low at 0.6414. The asset is not witnessing any signs of exhaustion in the downside bias and the pullback move will be crushed sooner by the market participants. The pair is expected to decline further towards the round-level support of 0.6400 ahead of the speech from Federal Reserve (Fed) chair Jerome Powell.
Fed Powell’s speech is expected to remain extremely hawkish to fulfill its primary objective of crushing the price rise index and retrieving it to the desired level of 2%. What’s interesting will be the guidance on interest rates for the remaining 2022. The Fed sees interest rates top at 4.6% from 3-3.25%. More significant rate hike announcements in the remaining year will decline the margin for achieving the targeted rates, and the world economy will see a slowdown in the pace of rate hikes later.
The US dollar index (DXY) is performing firmer on a lower-than-expected decline in the US Durable Goods Orders data. The decline in demand for Durable Goods landed at 0.2%, lower than the expectations of a drop of 0.4%. As the Fed is sticking to its path of hiking interest rates, a decline in demand for consumer durables cannot be ruled out. So a lower-than-expected reading cheered the DXY investors.
On the Australian front, investors are looking forward to the monthly Retail Sales data, which is expected to improve by 0.4% against the prior release of 1.3%. It seems that the retail demand is still increasing but is accelerating at a decreasing rate. A higher-than-expected Retail Demand will support the aussie bulls.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.