- A weak US economic calendar and an improved risk mood are supporting AUD/USD.Even if the US
- Dollar Index increased somewhat, Wall Street opens higher and influences currencies.
- The strength of the Australian dollar may be impacted by upcoming employment data, with estimates pointing to modest job growth.
Early in the North American session, the Australian Dollar reverses course and wins 0.33% against the US Dollar as risk appetite improves. The US economy was not doing well, despite Federal Reserve Chair Jerome Powell’s aggressive remarks and the US economy being scarce. Trade for the AUD/USD is at 0.6423.
AUD/USD gains despite hawkish Fed comments; focus on Australian jobs data
Wall Street is leading the way, starting the day higher. As the US Dollar Index (DXY) illustrates, US Treasury yields decline but the dollar does not weaken. At 106.24, the DXY is up 0.11%.
US data released this week demonstrated that while industrial production continues to rise, American consumers are still robust. On the down side, rising mortgage rates caused a sharp decline in US building permits and housing starts. According to the Mortgage Bankers Association (MBA), 30-year mortgage rates increased slightly, from 7.01% to 7.13%.
In addition to the statistics, Fed Chair Jerome Powell stated that maintaining stable interest rates for “as long as needed” would probably be necessary given the lack of progress on inflation. Powell was viewed as hawkish by the markets, but Wednesday’s price movement seems to indicate otherwise.
The Fed stated in its December 2023 predictions that most officials anticipated three rate cuts as a result of the disinflation process’s progression. Nevertheless, Powell’s inclination and a repricing of fewer rate reduction than anticipated were prompted by three months of stronger inflation than anticipated as measured by the Consumer Price Index (CPI).
Regarding Australia, it would involve the disclosure of employment information. While the unemployment rate is predicted to advance closer to 4%, the employment change is predicted to add 7.2K jobs to the workforce, far fewer than the 116.5K created in February. The Reserve Bank of Australia should adopt a more accommodating stance if the data is weak. Therefore, traders of AUD/USD could drive the pair lower.
AUD/USD Price Analysis: Technical outlook
Despite recovering, the AUD/USD is bearishly biased, and it would require buyers to achieve a daily close above the February 13 low of 0.6442. Otherwise, the pair’s first support would be the 0.6400 mark, followed by the April 16 daily low of 0.6389. The next support would be 0.6350, followed by the 0.6300 mark.
