AUD/USD consolidates at around 0.6740 for the week, with traders eyeing Fed speeches
- AUD/USD is set to finish the week with solid gains of 0.28%.
- The US ISM Services PMI was a tick lower than the previous month’s data, signaling the US economy is solid.
- AUD/USD traders eye Federal Reserve speeches throughout the day.
The AUD/USD jumped from around weekly lows below 0.6700 and climbed 0.44% on Friday. Factors like a risk-on impulse and an offered US Dollar (USD) keep the Australian Dollar (AUD) positive in the day. At the time of typing, the AUD/USD is trading at 0.6745.
AUD/USD creeps higher toward 0.6750
Sentiment remains upbeat, a headwind for the safety of the US Dollar. The US ISM Non-Manufacturing PMI for February was 55.1, slightly lower than the previous month’s 55.2. However, it exceeded expectations of 54.5, indicating that business activity is still strong. The Prices Paid Index subcomponent, looked by investors for inflationary pressures, increased to 65.6, above estimates of 64.5. Although it was lower than January’s 67.8, data would keep traders tracking Federal Reserve’s (Fed) officials’ speakers throughout the day.
US Federal Reserve’s (Fed) speakers highlighted the importance of tackling inflation towards the 2% target. On Thursday, Fed Governor Christopher Waller commented that inflation was not easing as expected and signaled his openness to increase rates if price pressures don’t reduce.
Following the release, the greenback weakened as the US Dollar Index recovered from daily lows and reached 104.924. As of writing, it resumed its downtrend at 104.848, down 0.11%.
The AUD/USD recovered after dropping toward 0.6732 and advanced towards 0.6760 before settling at around current exchange rates.
On the Australian side, the S&P Global Services PMI exceeded estimates, while the S&P Global Composite PMI was 50.6, higher than January’s 49.2, signaling the Australian economy is doing far better than expected.
Additionally, the Caixin Services PMI improved in China at 55, compared to 50.5 consensus, expanded at the fastest rhythm in six months in February as removing harsh COVID-19 restrictions revived customer demand, driving a solid increase in employment, a private sector survey showed on Friday.
What to watch?
Federal Reserve speakers will be crossing wires led by the Dallas Fed President Lorie Logan, Atlanta’s Fed Raphael Bostic, Fed Governor Michell Bowman, and the Richmond Fed President Thomas Barkin.
AUD/USD Technical levels
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
