AUD/USD prints slight gains post-FOMC minutes, mixed Aussie PMIs

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  • AUD/USD marginally down at 0.6550 after Fed reiterates hesitancy on rate cuts amid inflation concerns.
  • US 10-year Treasury yields rise, while the DXY dips slightly, reflecting the Fed's cautious outlook.
  • Mixed Australian PMI data shows services growth but manufacturing contraction, complicating RBA's policy path.

The Australian Dollar posted minuscule gains on Wednesday against the US Dollar, after the release of the Federal Reserve’s January meeting minutes emphasized policymakers remain hesitant to begin to ease policy. Therefore, the AUD/USD exchanges hands at 0.6550, down by 0.02% as the Asian session begins.

FOMC’s minutes failed to underpin the Greenback

The AUD/USD was subdued throughout most of the session until the minutes were released. The minutes showed that Fed officials are cautious about reducing interest rates prematurely. They stated that they would not consider it suitable to lower interest rates until there is "greater confidence" that inflation is on a sustainable path toward the 2% target. Despite recognizing that the risks associated with fulfilling both Fed’s mandates—price stability and maximum employment—are becoming more balanced, officials emphasized their continued focus on inflationary risks. They also noted that although the economic risks are tilted towards the downside, vigilance towards inflation remains a priority.

After the data, the US 10-year Treasury note yield resumed to the upside, ending the session three and a half basis points up at 4.319%, while the US Dollar fell. The US Dollar Index (DXY) an index that measures the currency’s performance against other six, dropped 0.05%, at 103.99.

Fed speakers remain hawkish, Aussie’s Manufacturing PMI contracts

The Richmond’s Fed President Thomas Barkin crossed the newswires, saying the latest inflation data is “less good,” expressing worries about services inflation.

In the meantime, the Judo Bank Flash PMIs for February were released, with the Composite and Services exceeding January’s readings and exiting from recessionary territory. The Services PMI came at 52.8, up from 491, and the Composite PMI was 51.8, up from 49. The outlier was Manufacturing, which came at 47.7, missing December’s 50.1, suggesting that manufacturing activity is contracting.

Warren Hogan, Chief Economist Advisor at Judo Bank said: “The February Flash PMI results weaken the case for monetary policy easing any time soon. If anything, the improvement in activity indicators in 2024 and a slight uptick in the price indexes suggest that the risks to monetary policy remain even balanced.”

AUD/USD Price Analysis: Technical outlook

the AUD/USD continued to trade sideways after the release of the Fed’s minutes, though sellers stepped in around the 200-day moving average (DMA) at 0.6561, dragging prices below the 0.6550 area. If they would like to remain in charge, the pair must drop below the 100-DMA at 0.6547 and extend below the 0.6500 figure. Once that area is cleared, the next support emerges at the current year-to-date (YTD) low of 0.6442. On the upside, if buyers reclaim the 200-DMA, look for a challenge at the 0.6600 threshold.

AUD/USD

Overview
Today last price 0.655
Today Daily Change -0.0004
Today Daily Change % -0.06
Today daily open 0.6554
 
Trends
Daily SMA20 0.6539
Daily SMA50 0.6641
Daily SMA100 0.6548
Daily SMA200 0.6565
 
Levels
Previous Daily High 0.6579
Previous Daily Low 0.6522
Previous Weekly High 0.6545
Previous Weekly Low 0.6443
Previous Monthly High 0.6839
Previous Monthly Low 0.6525
Daily Fibonacci 38.2% 0.6557
Daily Fibonacci 61.8% 0.6543
Daily Pivot Point S1 0.6524
Daily Pivot Point S2 0.6494
Daily Pivot Point S3 0.6467
Daily Pivot Point R1 0.6582
Daily Pivot Point R2 0.6609
Daily Pivot Point R3 0.6639

 

 

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