- AUD/USD renews intraday low, extends the previous day’s losses as softer Aussie data joins cautious mood.
- Australia’s Westpac Leading Index reprints -0.1% for January, Q4 Wage Price Index eased.
- Upbeat US data, firmer yields and hawkish Fed bets escalate anxiety ahead of FOMC Minutes.
AUD/USD drops 0.6835 as it stays on the bear’s radar for the second consecutive day ahead of the all-important Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes early Wednesday. In doing so, the Aussie pair not only portrays the market’s cautious mood but also bears the burden of downbeat data at home, as well as strong US statistics.
That said, Australia’s Westpac Leading Index marked -0.1% figure in January, the second time in a row, whereas the fourth quarter (Q4) Wage Price Index eased to 0.8% QoQ versus 1.0% expected and prior.
On the other hand, the preliminary US S&P Global Manufacturing PMI rose to 47.8 in February from 46.9 prior and versus 47.3 market forecasts while the Services PMI jumped to the eight-month high to 50.5 compared to 47.2 expected and 46.8 previous readings.
The strong data helped the FEDWATCH tool to suggest that the money market participants see the benchmark level peaking at 5.3% in July, and staying near those levels throughout the year, versus 5.10% expected by the US Federal Reserve (Fed).
It should be noted that the AUD/USD pair’s risk barometer status also keeps it weak amid the geopolitical concerns surrounding China and Russia. The comments from US Secretary of State Antony Blinken and Russian President Vladimir Putin were the top catalysts that weigh on the market sentiment as both suggest further tension between Moscow and Kyiv, which also includes indirect participation of the West and China of late.
While portraying the mood, the US 10-year and two-year treasury bond yields seesaw around the three-month highs marked the previous day while S&P 500 Futures print mild gains despite Wall Street’s negative closing.
Moving on, a light calendar ahead of the Fed Minutes can keep the AUD/USD on the bear’s radar and hence further declines toward Friday’s low of 0.6811, also the lowest level in six weeks, can’t be ruled out. However, the Minutes’ signal that the Fed policymakers discussed pivot, may quickly trigger the Aussie pair’s rebound.
Technical analysis
A daily closing below 200-day Exponential Moving Average (EMA), around 0.6860 by the press time, directs AUD/USD bears to poke a three-month-old ascending support line, close to 0.6820 at the latest, a break of which becomes necessary for the Aussie sellers to keep the reins.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.