Australian Dollar continues its winning streak after the positive Services PMI on Thursday.
Australia’s ASX 200 extends losses on weak sentiment due to expectations of prolonged higher borrowing costs.
FOMC Minutes expressed caution regarding interest rate cuts could potentially delay the start of an easing cycle.
Investors await S&P US PMI data, weekly Initial Jobless Claims, and Existing Home Sales on Thursday.
The Australian Dollar (AUD) extends its winning streak on Thursday that began on February 14. This positive momentum was fueled by encouraging preliminary Australian Purchasing Managers Index (PMI) data. The data indicated a notable return to growth in private sector activity in February, marking the end of a five-month downturn, particularly driven by robust expansion in the services sector. However, the manufacturing sector encountered difficulties due to increased interest rates, leading to the most significant decline in output since May 2020.
Australian Dollar (AUD) could face hurdles stemming from softer Aussie money markets, as the S&P/ASX 200 Index registers its third consecutive decline amidst subdued sentiment. The recent release of the Federal Open Market Committee (FOMC) Minutes, expressing caution regarding interest rate cuts, might postpone the onset of an easing cycle. Additionally, the Reserve Bank of Australia's (RBA) meeting minutes earlier this week shifted market sentiment towards the probability of no imminent rate cuts.
The US Dollar Index (DXY) encountered downward pressure despite the rise in US Treasury yields on Wednesday following the cautious tone expressed in the FOMC Minutes regarding the pace of interest rate reductions. The Meeting Minutes highlighted the necessity for further evidence of disinflation to alleviate concerns of upside risks. Presently, futures in funds indicate that approximately 70% of the market anticipates a rate cut by the Fed's June meeting. According to the CME FedWatch Tool, there's now a 52.2% probability assigned by the market for the initiation of easing to commence in June
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
Hot
No comment on record. Start new comment.