AUD/USD approaches 0.6600 as the US Dollar falls ahead of Fed Powell, Job Openings data

~~The Aussie Dollar reverses previous losses and hits fresh~~ YTD ~~highs near 0.6600.~~
~~Upbeat manufacturing data from China is buoying the Aussie on Tuesday.~~
~~Later today, Fed's Powell, US manufacturing and jobs data are likely to set the US Dollar's direction.~~

Guillermo Alcala FXStreet

The Australian Dollar keeps marching higher against a depressed US Dollar. The pair has reversed earlier losses and is trading higher for the second consecutive day, reaching fresh year-to-date highs at 0.6590.

The US Dollar extends its downtrend on Tuesday, crushed by a mix of US debt fears, hopes of Fed cuts in the second half of the year and the ongoing uncertainty about trade as the July 9 deadline approaches and major trade deals remain elusive.

China's upbeat manufacturing activity is supporting the AUD

Data from China released earlier today revealed that manufacturing activity returned to expansion levels, following a sharper-than-expected improvement in June. These figures have offset the soft NBS PMI reading seen on Monday and provided a fresh boost to the China-proxy AUD.

In the US, Trump’s sweeping tax bill, which is expected to add $3.3 trillion to the US debt pile, is going through a lengthy voting process in the Senate, with investors´ concerns about a debt crisis in the US rising.

This, coupled with increasing bets that the Fed will accelerate its monetary easing cycle in the coming months, and the looming threat of higher tariffs, amid the lack of significant progress on deals with trading partners, id creating a perfect storm for the USD.

Later today, the Fed Chairman, Jerome Powell´s comments at a central bankers’ summit in Sintra, Portugal, might provide further insight on the bank's rate-cutting calendar. Somewhat later, US manufacturing and employment figures will be analysed to confirm Powell’s views.

Economic Indicator

Caixin Manufacturing PMI

The Caixin Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by Caixin Insight Group and S&P Global, is a leading indicator gauging business activity in China’s manufacturing sector. The data is derived from surveys of senior executives at both private-sector and state-owned companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation.The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for CNY.

Economic Indicator

Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

Economic Indicator

JOLTS Job Openings

JOLTS Job Openings is a survey done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD struggles for direction amid USD gains

EUR/USD is trimming part of its earlier gains, coming under some mild downside pressure near 1.1730 as the US Dollar edges higher. Markets are still digesting the Fed’s latest rate decision, while also looking ahead to more commentary from Fed officials in the sessions ahead.

GBP/USD drops to daily lows near 1.3360

Disappointing UK data weighed on the Sterling towards the end of the week, triggering a pullback in GBP/USD to fresh daily lows near 1.3360. Looking ahead, the next key event across the Channel is the BoE meeting on December 18.

Gold losses momentum, challenges $4,300

Gold now gives away some gains and disputes the key $4,300 zone per troy ounce following earlier multi-week highs. The move is being driven by expectations that the Fed will deliver further rate cuts next year, with the yellow metal climbing despite a firmer Greenback and rising US Treasury yields across the board.

Litecoin Price Forecast: LTC struggles to extend gains, bullish bets at risk

Litecoin (LTC) price steadies above $80 at press time on Friday, following a reversal from the $87 resistance level on Wednesday. Derivatives data suggests a bullish positional buildup while the LTC futures Open Interest declines, flashing a long squeeze risk.

Big week ends with big doubts

The S&P 500 continued to push higher yesterday as the US 2-year yield wavered around the 3.50% mark following a Federal Reserve (Fed) rate cut earlier this week that was ultimately perceived as not that hawkish after all. The cut is especially boosting the non-tech pockets of the market.

Aave Price Forecast: AAVE primed for breakout as bullish signals strengthen

Aave (AAVE) price is trading above $204 at the time of writing on Friday and approaching the upper boundary of its descending parallel channel; a breakout from this structure would favor the bulls.