- AUD/USD hit a weekly high around 0.6956, but data and sentiment bolstered the USD.
- Rising US Treasury yields underpinned the dollar, creating a headwind for AUD/USD.
- US consumer confidence improves, while job openings rise.
The AUD/USD faced strong resistance around the 20-day EMA at 0.6959 and dipped below 0.6900 amid a risk-off drive, with the US dollar regaining its composure and rising, supported by rising prices. US Treasury bond yields. Global equities remain strong on expectations of a hawkish Federal Reserve following Chairman Powell’s remarks.
AUD/USD hit a daily high earlier in the European session, rising towards the 0.6956 figure, though pulled back as sentiment soured. Meanwhile, the mixed economic data out of the US turned out to be bad news for AUD/USD, falling towards its daily low of 0.6858 in the North American session. At the time of writing, the AUD/USD is trading at 0.6878, below its opening price.
AUD/USD lowers on dollar strength after mixed US data.
The US Dollar Index, which measures the dollar’s performance against a basket of six currencies, rose 0.21% to 198.976, while the 10-year Treasury yield stood at 3.13%, with a rise of two basis points.
Elsewhere, US consumer confidence surprised to the upside, to 103.2, above estimates of 98, according to Reuters. “Looking ahead, improving sentiment in August may help support spending, but inflation and further rate hikes remain a risk to near-term economic growth,” said Lynn Franco, senior director at the Conference Board.
Additionally, the US Department of Labor reported that job openings, according to the JOLTs Opening report, unexpectedly increased in July, with vacancies rising to 11.2 million, above all estimates. The same report showed that resignations dropped from 2.8% to 2.7%.
On the other hand, in the Asian session, Australian consumer confidence, according to the ANZ Morgan Consumer Confidence report, moderated by 0.7%. At the same time, housing data showed the impact of the rate hike, which pushed up mortgage rates.
Analysts at ANZ bank commented that rate hikes and rising cost of debt contributed to the decline in building approvals. They added: “We expect total building approvals to continue to fall as more rate hikes put downward pressure on the borrowing capacity of both developers and individual homebuilders.”
What to do
The Australian economic docket is thin, unlike in the US, where figures from the ADP, Fed, ISM PMI and Non-Farm Payrolls report are expected to provide a further boost to AUD/USD traders.
AUD/USD Key Technical Levels
Source: Fx Street
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