Australian Dollar holds steady as US PCE inflation reinforces Fed caution

AUD/USD remains muted with the Australian Dollar struggling to gain traction despite a pullback in the Greenback.
US PCE inflation rose to 4.1% YoY in May, while core PCE increased to 3.4% YoY.
Iran warned that uncoordinated shipping routes through the Strait would be “unacceptable and dangerous.”

Agustin Wazne FXStreet

The AUD/USD pair trades muted near the 0.6900 area on Thursday, with the Aussie struggling to gain amid a pullback in the US Dollar (USD) as investors digested the latest United States (US) inflation figures and fresh geopolitical risks around the Strait of Hormuz.

Annual inflation in the United States, measured by the Personal Consumption Expenditures (PCE) Price Index, climbed to 4.1% in May from 3.8% in April, according to the Bureau of Economic Analysis. The core PCE Price Index, which excludes volatile food and energy prices, rose to 3.4% YoY, up one-tenth of a point, while monthly headline PCE increased 0.4% and core PCE rose 0.3%.

Australia’s labor market showed signs of recovery in May, with Employment Change rising by 40.3K, above expectations of 25K and rebounding sharply from the previous 40.7K decline. The increase was mainly driven by part-time employment, which rose by 35.2K, while the Unemployment Rate held steady at 4.4%, matching forecasts and easing from the previous 4.5%.

Meanwhile, geopolitical uncertainty added another layer of pressure on the risk-sensitive Australian Dollar, capping its gains. Iran’s Islamic Revolutionary Guard Corps warned that safe passage through the Strait of Hormuz would only be allowed through routes designated by Tehran, calling any newly announced shipping lanes without coordination “unacceptable and dangerous.” It also warned that vessels ignoring instructions could face action.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.6903, maintaining a bearish near-term bias as price remains below both the 20-period Simple Moving Average (SMA) at 0.6929 and the 100-period SMA at 0.7031. The configuration of these SMAs above spot suggests rallies are likely to be sold into, while the Relative Strength Index (RSI) hovering just above the oversold band near 31 hints that downside momentum is still present but may be losing some intensity.

On the topside, initial resistance is located at the 20-period SMA around 0.6929, with a stronger barrier emerging at the 100-period SMA near 0.7031. In the absence of clearly defined indicator-based supports below current levels, traders may instead look to prior price lows on the four-hour chart for interim floors, but the broader structure favors selling into bounces while AUD/USD trades under the clustered moving averages.

(The technical analysis of this story was written with the help of an AI tool.)

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

AUD/USD tumbles amid soaring US yields, ahead of jobs data

The Aussie Dollar stumbles over 1% against the US Dollar on Wednesday as US Treasury yields soar, with the US 5- and 10-year T-note yields surpassing the 5% threshold amid investor confidence in further Federal Reserve tightening. The AUD/USD trades at 0.7039 after peaking at 0.7118.

USD/JPY stands firm near mid-157.00s, close to two-week high

USD/JPY hovers around mid-157.00s in the Asian session on Wednesday, near two-week highs touched last Friday as the BoJ's dovish rate hike continues to undermine the Japanese Yen. Meanwhile, the US Dollar remains firm amid the Fed's hawkish stance, adding support to the pair, though JPY intervention fears cap further gains. Markets pay little heed to the completion of the round of US-Iran indirect talks ahead of Trump-Xi meeting.

Gold falls to weekly troughs below $4,300

Gold rapidly leaves behind two daily upticks in a row and comes under heightened downside pressure midweek. Indeed, the precious metal breaches below the $4,300 mark per troy ounce to reach weekly lows amid the marked recovery in the US Dollar and the generalised upbeat tone in the US money market.

Australia unemployment rate expected to remain unchanged at 4.5% in August

Australia will release the August monthly employment report on Thursday at 01:30 GMT. Ahead of the announcement, analysts expect the country to have added 20K new jobs in the month, while the Unemployment Rate is expected to remain steady at 4.5%. The Australian Bureau of Statistics (ABS) report is also expected to show that the Participation Rate stood at 66.9%, unchanged from the previous month.

The 10 November cliff: How markets should trade the Trump Xi truce

Markets tend to treat summits as events. They are better understood as deadlines. The meeting between Donald Trump and Xi Jinping at the White House, which opens on Thursday September 24thm and runs through Friday the 25th, will produce warm words, contracts announcements, and a great deal of ceremony. What it may not produce is the one thing traders actually need, which is clarity about 10 November.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.