- AUD/USD hovers in a tight range as traders stand on the sidelines awaiting the Fed.
- Surprise RBA rate hike continues to support AUD and benefit the pair.
- The USD retracement from its three-week high helps limit the pair’s decline.
he pair AUD/USD has struggled to gain ground and oscillates between tepid gains and minimal losses, just above the 0.6650 regionduring the European session on Wednesday.
The Australian dollar (AUD) continues to get some support from the Reserve Bank of Australia’s surprise rate hike (RBA) of 25 basis points on Tuesday and a more hawkish outlook. This, along with the US dollar retreat from the three-week high reached the day before, acts as a tailwind for the AUD/USD pair. The publication of the US Job Offers and Job Turnover Survey (JOLTS) indicated on Tuesday that the tense US job market is easing. Apart of this, Concern over the US debt ceiling and renewed fears of a full-blown banking crisis dragged the dollar lower for the second day in a row.
Apart of this, Modest recovery in US stock index futures weakens safe-haven USD and benefits AUD, sensitive to risk. However, the AUD/USD pair remains limited in its upside as traders seem reluctant to open aggressive positions ahead of the expected FOMC monetary policy decision, which will be announced later in the American session today. The Federal Reserve (Fed) is expected to raise rates by 25 basis pointsAlthough investors seem divided on the possibility of the Fed announcing a pause in its rate hike cycle, as inflation continues to trend well above the central bank’s target range.
Therefore, the focus will be on the monetary policy statement and Fed Chairman Jerome Powell’s comments at the post-meeting press conference, which will be scrutinized for clues on the future path of hikes. of rates. This, in turn, will play a key role in influencing short-term USD price dynamics and provide a significant boost to the AUD/USD pair. Ahead of the key central bank event, traders could look to the US economic calendar, with the release of the ADP Private Sector Employment report and the ISM Services PMI, to take advantage of some short-term opportunities. term.
Technical levels to watch
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.
