AUD/USD climbs after Fed’s decision, ahead of Aussie’s job data
- AUD up 0.83% vs. USD after Fed holds policy steady.
- Wall Street up, praises US economy, labor strength post-Fed.
- US 10-year yield dips, Dollar Index down, hints AUD/USD rise.
- Mixed Australia PMI, strong job outlook may sway RBA policy.
The Australian Dollar soared 0.83% against the US Dollar on Wednesday as the Federal Reserve held rates steady while maintaining their monetary policy outlook from last year, with 75 basis points (bps) of rate cuts in 2024. As the Asian session begins, the pair trades at 0.6595, up 0.14%.
Aussie Dolar gains momentum amid the beginning of Asia session
Wall Street ended the session on a higher note following the Fed’s decision. The US central bank kept the Federal Funds rate (FFR) at 5.25%- 5.50% and stated that the economy and the jobs market are robust. The disinflation process had evolved, but the last two readings of the CPI and PPI justified the Fed’s rhetoric of being patient. Despite that, Fed officials stick to their three rate cuts in 2024.
Following the data, the US 10-year Treasury note yield fell one and a half basis points to 4.277%, while the Greenback got battered. The US Dollar Index (DXY), a gauge of the buck’s value against other currencies, tumbles 0.42% and sits at 103.38, aiming below the 200-day moving average (DMA), a key dynamic support level, that depicts a financial markets asset as bullish or bearish.
On the Aussies' front, the schedule featured the release of Judo Bank Flash PMI figures for March. The manufacturing PMI dipped from 47.8 to 46.8, while the Services PMI rose from 53.1 to 53.5. The Composite Index came at 52.4, up from 52.1.
AUD/USD traders’ eye further data from Australia, with the jobs market expected to add 40,000 people to the workforce. That would lower the unemployment rate, from 4.1% to 4%. A strong reading could suggest the Reserve Bank of Australia (RBA) should stick to its current stance and shrug off speculations of the first-rate cut in August.
AUD/USD Price Analysis: Technical outlook
From a technical perspective, the AUD/USD printed a leg-up, clearing key resistance levels and poised to breach the 0.6600 figure. The Relative Strength Index (RSI) confirms that statement, as it aims higher in bullish territory, with the pair closing at weekly highs, snapping four days of losses. The next supply zone would be the psychological 0.6650 mark, followed by the March 8 high at 0.6667. Once cleared, that would expose 0.6700.
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
