• AUD/USD declines to 0.6608 as US Treasury yields climb amid soft bond demand.
  • Mixed regional Fed surveys and hawkish remarks from Fed’s Kashkari impact market sentiment.
  • Australian CPI rises to 3.6% YoY in April; analysts expect rate cuts starting in November.

The Aussie Dollar tumbled more than 0.50% on Wednesday versus the Greenback amid elevated US Treasury yields, as another bond auction witnessed softer demand. A scarce economic docket in the United States (US) featured the release of regional Fed surveys, which were mixed. The AUD/USD trades at 0.6608, almost flat as Thursday’s Asian session commences.

AUD/USD falls towards 0.6600 on hawkish Fed comments, high US yields

Sentiment remains sour as Wall Street ended Wednesday's session in the red. Investors were rattled by Tuesday’s uber-hawkish tilt of Minneapolis Fed President Neel Kashkari, who commented that rate hikes are not off the table. When questioned about lowering interest rates, he said that he expects no more than two cuts.

Meanwhile, data from the Chicago Board of Trade (CBOT) shows that investors had priced in 25 basis points of rate cuts in 2024, according to December’s 2024 fed funds future contract.

Data-wise, the US economic schedule featured regional Fed activity surveys index for May, which were mixed. The Richmond Fed Manufacturing Index improved to 0, from a -7 plunge in the last print. The Dallas Fed Services Index weakened to -12.1, worse than April’s -10 contraction.

On the Aussie’s front, the monthly Consumer Price Index (CPI) rose to a five-month high of 3.6% YoY in April, up from 3.5% in March. According to ANZ analysts, “Disinflation in underlying inflation measures has also stalled. Our forecast for a November start to cash rate cuts is unchanged, although risks remain tilted towards a later start.”

The economic docket in Australia will feature a speech by Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter and data on Building Permits.

AUD/USD Price Analysis: Technical outlook

Despite remaining bullish-biased, the AUD/USD seems poised for a pullback if buyers fail to defend 0.6600. Momentum shows that sellers are stepping in, as the Relative Strength Index (RSI) pierced below the 50-midline. This could pave the way for increased selling pressure, driving prices lower.

In that event, key support levels emerge. The confluence of the 50- and 100-day moving averages (DMAs) is at around 0.6558/59, followed by the 200-DMA at 0.6531. Conversely, if buyers keep spot prices above 0.6600, if they gather traction, the pair could aim towards 0.6650.

Australian Dollar PRICE This week

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the Euro.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   0.43% 0.32% 0.41% 0.39% 0.30% 0.03% -0.16%
EUR -0.43%   -0.14% 0.00% -0.05% -0.19% -0.49% -0.54%
GBP -0.32% 0.14%   0.08% 0.07% -0.04% -0.28% -0.43%
JPY -0.41% 0.00% -0.08%   -0.05% -0.12% -0.29% -0.58%
CAD -0.39% 0.05% -0.07% 0.05%   -0.10% -0.36% -0.59%
AUD -0.30% 0.19% 0.04% 0.12% 0.10%   -0.22% -0.39%
NZD -0.03% 0.49% 0.28% 0.29% 0.36% 0.22%   -0.18%
CHF 0.16% 0.54% 0.43% 0.58% 0.59% 0.39% 0.18%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

 

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