- AUD/USD is paring some of its Wednesday gains on Thursday.
- Mixed US economic data, a headwind for the Aussie, which fell despite broad US dollar weakness.
- Comments on the tight monetary policy of US central banks continued, led by Mester and Bullard.
- Australian inflation eased ahead of the October RBA meeting.
AUD/USD pulls back from weekly highs reached on Wednesday, when the Aussie hit a weekly high of 0.6530, although positive US economic data showing the labor market remains strong would not deter the Fed to continue tightening monetary conditions. Therefore, the AUD/USD is falling.
At time of writing, AUD/USD is trading at 0.6474, having hit a daily high of 0.6524, down a solid 0.74% from its opening price.
Before Wall Street opened, US economic data released by the Departments of Commerce and Labor gave mixed signals about the current economic situation in the United States. According to the first, the US Gross Domestic Product (GDP) for the second quarter was confirmed with a contraction of 0.6%, in line with forecasts and the previous reading, which confirms that the US economy is in a technical recession.
By contrast, US initial jobless claims for the past week, ending September 24, slowed to a pace of 193,000 and hit the lowest level in five months, beating estimates of 215,000. . Notably, a softer reading of claims, namely the four-week moving average, fell for the fifth week in a row to 207,000.
Meanwhile, Fed officials remained active throughout the day. Loretta Mester of the Cleveland Fed said trade-offs with growth will become more relevant as inflation eases again. She added that, given the persistence of inflation, she “puts even more weight on making sure the Fed does enough.”
“We are not yet in restricted territory on the funds rate,” he added.
Earlier, St. Louis Fed President James Bullard said the Fed is determined to bring inflation to the right level of policy rates, in order to meet the Fed’s inflation target. could go into recession while the Fed lowers inflation, although he stressed that it is not “his base case.”
Earlier in the Asian session, Australia reported August inflation, which eased slightly due to falling petrol prices, data showed, ahead of the Reserve Bank of Australia (RBA) monetary policy meeting. in the next week. The Australian CPI rose 6.8% year-on-year, down from 7% in July,
On Friday, the Australian economic calendar will include readings for Home Credit and Credit to the Private Sector. In the US, the Fed’s favorite inflation gauge is the consumer staples price index, the Chicago PMI, and the University of Michigan’s consumer sentiment.
AUD/USD Key Technical Levels
|last price today||0.6474|
|daily change today||-0.0049|
|Today’s daily variation in %||-0.75|
|Daily opening today||0.6523|
|Previous daily high||0.6531|
|Previous Daily Low||0.6363|
|Previous Weekly High||0.6748|
|Previous Weekly Low||0.6512|
|Previous Monthly High||0.7137|
|Previous Monthly Low||0.6835|
|Daily Fibonacci of 38.2%||0.6467|
|Daily Fibonacci of 61.8%||0.6427|
|Daily Pivot Point S1||0.6414|
|Daily Pivot Point S2||0.6305|
|Daily Pivot Point S3||0.6246|
|Daily Pivot Point R1||0.6581|
|Daily Pivot Point R2||0.664|
|Daily Pivot Point R3||0.6749|
Source: Fx Street