AUD/USD advances towards 0.6400 as the Dollar falls ahead of the Fed

• The AUD/USD pair approached 0.6400 and the US Dollar corrected amid improving market sentiment.
• US 10-year Treasury yields rose to around 4.89%, reflecting investor confidence in the strength of the US economy.
• Caixin Manufacturing PMI data for October will widen to 50.8 from the previous release of 50.6.

The pair AUD/USD extends its gains above the crucial resistance of 0.6368 in the early stages of the New York session. The pair is approaching the resistance of the 0.6400 round level while the US Dollar has corrected after failing to recover above the 106.70 resistance.

The S&P 500 opens on a strong bullish note as investors expect the Federal Reserve (Fed) to have ended interest rate hikes and a neutral comment is expected for the second time in a row. The market mood has turned cheerful as the Fed’s failure to raise interest rates further gives US businesses optimism.

Rising US bond yields are responsible for expectations of a firm Fed interest rate decision. The 10-year US Treasury yield approached 4.89%, reflecting investor confidence in the strength of the US economy and expectations that the Fed will keep interest rates higher for quite some time. longer.

The US Dollar Index (DXY) corrected to near 106.28 as investors focused on October ADP and Manufacturing PMI data, due to be released on Wednesday. Investors will be closely watching data from US factories, which have been in constant contraction for 11 months. The S&P Global survey showed that the private manufacturing PMI reached the 50.0 threshold in October.

For its part, the Australian dollar will be affected by the October Caixin Manufacturing PMI data. According to the consensus, the economic data expanded to 50.8 compared to the previous publication of 50.6. It should be noted that Australia is China’s largest trading partner and increased factory activities in China support the Australian Dollar.