AUD/USD recovers the 0.6800 level although remains under pressure in a mixed environment

• AUD/USD hit a new all-time low around 0.6776.
• The US manufacturing PMI for June continued to expand but at a slower pace.
• The Australian and Chinese PMIs were better than expected, but a jump in US bond yields prevented the pair from recovering further.

The AUD/USD plummeted to new record lows near 0.6776, following damaging US manufacturing data, although as the American session progressed it has regained some ground and is closer to the 0.6800 figure. At 0.6821, AUD/USD remains depressed and poised to end the week with substantial 2% losses.

A mixed market environment and a pullback in the US dollar index capped AUD/USD losses

The mood has improved as Friday’s session begins to wind down. US equities trimmed earlier losses, save for the tech-heavy Nasdaq which fell 0.19%, after weaker-than-expected US ISM Manufacturing data expanded though hit the lowest level of the past two years, as new orders contracted. This set off alarm bells among investors, who also turned to safe-haven assets and bought US Treasuries, which was reflected in falling US Treasury yields, with down 25 basis points over 2 years as traders priced in a less aggressive than expected US Federal Reserve.

Meanwhile, Timothy R. Fiore, president of the Institute for Supply Management, commented on the report that the manufacturing sector is being “driven” by demand, while it has been “held back by supply chain constraints.” In addition, the employment index, despite contracting, shows progress, according to the study. Prices fell for the third consecutive month, while new orders fell.

During the Asian session, AUD/USD traders referenced the Australian S&P Global Manufacturing PMI, which came in at 56.2, higher than expected, capping the AUD/USD decline. Late in the session, China’s Caixin Manufacturing PMI rose to 51.7 for June, vs. 50.1 forecast and 48.1 previously.

Technical levels