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AUD/USD holds positive ground above 0.6650 as weaker US Retail Sales data boosts Fed rate cuts chance

  • AUD/USD drifts higher around 0.6660 in Wednesday’s early Asian session. 
  • US Retail Sales came in weaker than expected, rising 0.1% MoM in May from a 0.2% drop in April.
  • The RBA left the cash rate at 4.35% on Tuesday, as widely expected. 

The AUD/USD gains traction near 0.6660 during the trading hours on Wednesday. The pair edges higher after the weaker-than-expected US Retail Sales data and hawkish hold from the Reserve Bank of Australia (RBA) at its June meeting on Tuesday. 

The recent US Retail Sales report suggested signs of subdued activity among US consumers, prompting the case for US Federal Reserve (Fed) rate cuts later this year, which weakened the Greenback broadly. The US Retail Sales increased 0.1% on a monthly basis in May from a 0.2% drop in April, below the consensus for a rise of 0.2%, according to the Commerce Department on Tuesday.

Many Fed officials on Tuesday highlighted the Fed's commitment to making decisions based on incoming economic data. Boston Fed President Susan Collins warned against overreacting to "promising" economic news. Collins added that despite progress on inflation, it is still too early to say whether or not inflation is on course towards the Fed’s 2% target. 

Meanwhile, Richmond Fed President Thomas Barkin, said the recent data showed consumer prices did not rise at all from April to May, but the choppiness in data since last year means the policy path ahead is not clear. Investors are now pricing in a first-rate cut in September, with a second rate cut expected in December.

On the Aussie front, the RBA left the key interest rate unchanged at 4.35% for the fifth consecutive meeting in June, as widely anticipated by market participants. The central bank decided to stay the course on policy as it needed a lot to go its way to bring inflation back to range. The monetary policy statement showed that inflation remains above target and is proving persistent and the RBA needs to be confident that inflation is moving sustainably towards the target range. The hawkish hold from the RBA provides some support for the AUD and creates a tailwind for the AUD/USD pair. 

USD/JPY

Overview
Today last price157.85
Today Daily Change0.13
Today Daily Change %0.08
Today daily open157.72
 
Trends
Daily SMA20156.76
Daily SMA50155.68
Daily SMA100152.77
Daily SMA200150.13
 
Levels
Previous Daily High157.96
Previous Daily Low157.16
Previous Weekly High158.26
Previous Weekly Low155.72
Previous Monthly High157.99
Previous Monthly Low151.86
Daily Fibonacci 38.2%157.65
Daily Fibonacci 61.8%157.46
Daily Pivot Point S1157.27
Daily Pivot Point S2156.81
Daily Pivot Point S3156.46
Daily Pivot Point R1158.07
Daily Pivot Point R2158.42
Daily Pivot Point R3158.87



 

 

Author

Lallalit Srijandorn

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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