- AUD/USD takes offers following the surprise downbeat data from China.
- China’s Caixin Manufacturing PMI dropped below expectations and prior readouts in March.
- Risk dwindles amid mixed clues, US dollar index extends previous day’s pullback moves.
- US ISM Manufacturing PMI, risk news will be crucial to follow.
AUD/USD drops to the fresh weekly low of 0.7575 following a negative surprise from China during early Thursday. Also contributing to the quote’s weakness could be the US dollar’s rebound and sluggish sentiment.
China’s Caixin Manufacturing PMI came in as 50.6 versus 51.3 forecasts and 50.9 prior. This suggests the activity figures from Australia’s largest customer contrast the upbeat official readings published earlier in the week.
Read: China's Caixin manufacturing PMI unexpectedly drops to 50.6 in March, AUD/USD in weekly lows
Earlier in the day, figures concerning Aussie retail sales, housing and foreign trade came in mixed. However, the AUD/USD benefited from news of no fresh covid cases in New South Wales (NSW) and an absence of further covid lockdown in Brisbane.
Also positive to the risks, favorable to the AUD/USD, could be recently positive US data and hopes of faster economic recovery on strong vaccination drive in America and the UK. Further, Pfizer’s 100% vaccine efficacy for children battles Johnson and Johnson’s fears of staying behind the jab delivery schedule.
It should, however, be noted that the sober welcome of US President Joe Biden’s $2.25 trillion infrastructure spending plan and fears of getting it rejected in the house weigh on market sentiment. Further, the West versus China story stays active but major attention is given to the covid, vaccine and stimulus headlines off-late.
Against this backdrop, S&P 500 Futures wobbles above 3,950, up 0.05% intraday, while the US 10-year Treasury yields waver around 1.74-75%. It should, however, be noted that the US dollar index (DXY) refrains from extending the previous day’s pullback moves by the press time.
Moving on, the US traders’ reaction to Biden’s plan will be the key while covid and vaccine headlines could entertain traders as well. Also important will be the US ISM Manufacturing PMI for March, expected 61.3% versus 60.8 prior.
Read: ISM Manufacturing Purchasing Managers’ Index March Preview: Consumer confidence reinforcement
Technical analysis
Repeated failures to cross the 0.7700 immediate hurdle suggests AUD/USD bears’ determination to break the 0.7562-57 horizontal area comprising lows marked since December 28, 2020.
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