- AUD / USD was under renewed downward pressure in the American session.
- The US dollar index rose to a new weekly high of 92.30.
- The Fed’s Clarida anticipates that the Fed will announce a gradual reduction by the end of the year.
The pair AUD/USD It rose to its highest level since mid-July at 0.7427 on Wednesday, but changed direction during US business hours. At time of writing, the pair was down 0.24% on the day at 0.7376.
Clarida’s aggressive comments elevate the DXY
Earlier in the day, renewed USD weakness following disappointing labor market data helped AUD / USD continue to climb. The Automatic Data Processing Research Institute (ADP) announced that private sector employment increased by 330,000 in July, missing the market consensus of 695,000 by a wide margin. With the initial reaction, the US Dollar Index (DXY) fell below 92.00.
However, comments from Fed Vice Chairman Richard Clarida on the political outlook provided a boost to the dollar and the DXY hit its strongest level in a week at 92.30.
Clarida said that he expects the pre-set conditions to increase the policy rate to be met by the end of 2022. “I can certainly see that the Fed will announce a gradual reduction later this year,” Clarida added. Currently, the DXY is up 0.22% on the day at 92.27.
On Thursday, the June trade balance will be the only data included in the Australian economic agenda. However, this report is not expected to affect AUD / USD movements and investors are likely to remain focused on the USD market valuation.