The Australian Dollar posted minuscule gains on Wednesday against the US Dollar, after the release of the Federal Reserve’s January meeting minutes emphasized policymakers remain hesitant to begin to ease policy. Therefore, the AUD/USD exchanges hands at 0.6550, down by 0.02% as the Asian session begins.
The AUD/USD was subdued throughout most of the session until the minutes were released. The minutes showed that Fed officials are cautious about reducing interest rates prematurely. They stated that they would not consider it suitable to lower interest rates until there is "greater confidence" that inflation is on a sustainable path toward the 2% target. Despite recognizing that the risks associated with fulfilling both Fed’s mandates—price stability and maximum employment—are becoming more balanced, officials emphasized their continued focus on inflationary risks. They also noted that although the economic risks are tilted towards the downside, vigilance towards inflation remains a priority.
After the data, the US 10-year Treasury note yield resumed to the upside, ending the session three and a half basis points up at 4.319%, while the US Dollar fell. The US Dollar Index (DXY) an index that measures the currency’s performance against other six, dropped 0.05%, at 103.99.
The Richmond’s Fed President Thomas Barkin crossed the newswires, saying the latest inflation data is “less good,” expressing worries about services inflation.
In the meantime, the Judo Bank Flash PMIs for February were released, with the Composite and Services exceeding January’s readings and exiting from recessionary territory. The Services PMI came at 52.8, up from 491, and the Composite PMI was 51.8, up from 49. The outlier was Manufacturing, which came at 47.7, missing December’s 50.1, suggesting that manufacturing activity is contracting.
Warren Hogan, Chief Economist Advisor at Judo Bank said: “The February Flash PMI results weaken the case for monetary policy easing any time soon. If anything, the improvement in activity indicators in 2024 and a slight uptick in the price indexes suggest that the risks to monetary policy remain even balanced.”
the AUD/USD continued to trade sideways after the release of the Fed’s minutes, though sellers stepped in around the 200-day moving average (DMA) at 0.6561, dragging prices below the 0.6550 area. If they would like to remain in charge, the pair must drop below the 100-DMA at 0.6547 and extend below the 0.6500 figure. Once that area is cleared, the next support emerges at the current year-to-date (YTD) low of 0.6442. On the upside, if buyers reclaim the 200-DMA, look for a challenge at the 0.6600 threshold.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.