- AUD/USD comes under some selling pressure on Thursday, although the decline looks supported.
- Recession fears limit market optimism and weigh on the risk-sensitive AUD.
- Rising expectations for lower Fed rate hikes weigh on the USD and help limit deeper losses in the pair.
The AUD/USD finds decent support near the 0.6800 level and recovers some pips from its daily low at the beginning of the European session. The pair is currently hovering around the 0.6810 zone, slightly down on the day, and still well below the multi-month high it retested on Wednesday.
Despite the reopening of the Chinese economy, growing recession fears They keep any optimism in the markets at bay and act as a headwind for the risk-sensitive Australian dollar. For their part, the falls seem to be cushioned, at least for the moment, amid a softer tone around the US dollar, which continues to be weighed down by the prospects of lower rate hikes by the Fed.
In fact, the minutes of the December FOMC policy meeting, released on Wednesday, showed that officials unanimously supported a slower increase in borrowing costs. This, in turn, keeps US Treasury yields under pressure near three-week lows and is seen as weakening the dollar. Traders, however, seem reluctant to open aggressive positions ahead of the US macro data.
On Thursday’s agenda will be published the ADP report on employment in the private sector and initial weekly claims for unemployment benefits. This, along with US bond yields and broader risk sentiment, will influence USD dynamics and provide some momentum for AUD/USD. However, attention will remain focused on the US employment report (NFP), which is scheduled for release on Friday.
AUD/USD technical levels
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.
