- The AUD/USD pair failed to gain traction on mounting US recession fears and weak Ausslie jobs data.
- Initial jobless claims in the US were better than expected, cushioning the dollar’s decline.
- The odds of a rate hike by the RBA stand at around 60%, while 40% expect no change in its monetary policy.
The pair AUD/USD fell for the second day in a row, hitting a fresh weekly low at 0.6871, on a risk aversion momentum spurred on by recession fears rising after US economic data actually showed the economy slowing . The Fed’s hawkish comments spooked investors into safety. At the time of writing, the AUD/USD pair is trading at 0.6901, 0.61% below its opening price.
Rising US concerns a headwind for AUD/USD
The AUD/USD pair continues to weaken, despite the fact that the US dollar (USD) continues to offer broadly. Inflation data on Wednesday in the United States (US) cooled, reflecting the tightening of monetary conditions imposed by the US Federal Reserve (Fed). However, consumers are feeling the pinch as Retail Sales plunged on a monthly basis while Industrial Production (IP) fell for the second month in a row.
The US economic calendar on Thursday saw jobless claims rise by 190,000, 24,000 disappointing expectations, while continuation benefit claims fell. At the same time, home construction starts and building permits missed estimates, while the Philadelphia Fed’s manufacturing index, although in contraction territory (-8.9), improved from the reading of -13.7. of November.
The dollar index, which measures the value of the dollar against a basket of currencies, had two consecutive days of losses and fell 0.24% to 102,165 points. However, a late recovery in US Treasury yields, specifically the 10-year Treasury yield, is up four basis points to 3.411%, putting a headwind for AUD/USD.
On the Australian side, employment numbers unexpectedly fell in December, a headwind for the Aussie (AUD). Money Markets Futures imply a 60% chance the Reserve Bank of Australia (RBA) will raise rates in February, but there is also a 40% chance the RBA will pause as rates They are up 300 basis points.
What must be considered?
An absent Australian economic agenda will have AUD/USD traders leaning towards US dollar action. In the United States, Existing Home Sales and the Fed will be published.
AUD/USD key technical level
|Last price today||0.6898|
|Today Change Daily||-0.0038|
|today’s daily variation||-0.55|
|today’s daily opening||0.6936|
|previous daily high||0.7064|
|previous daily low||0.6936|
|Previous Weekly High||0.6994|
|previous weekly low||0.686|
|Previous Monthly High||0.6893|
|Previous monthly minimum||0.6629|
|Fibonacci daily 38.2||0.6985|
|Fibonacci 61.8% daily||0.7015|
|Daily Pivot Point S1||0.6893|
|Daily Pivot Point S2||0.685|
|Daily Pivot Point S3||0.6765|
|Daily Pivot Point R1||0.7022|
|Daily Pivot Point R2||0.7107|
|Daily Pivot Point R3||0.715|
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.