The Australian Dollar (AUD) saw gains for the second straight day on Wednesday, bolstered by robust economic data and a declining US Dollar.
Key factors driving the AUD's performance include:
- Retail Sales: Australia's Retail Sales jumped by 0.6% in May, significantly above the anticipated 0.2% increase and the previous month's 0.1% rise. This robust growth highlights strong consumer spending.
- Purchasing Managers Index (PMI): Judo Bank's Australia Services PMI inched up to 51.2 in June from 51.0 in May, beating expectations. The Composite PMI also showed a slight increase to 50.7 from 50.6.
The weakening of the US Dollar further supported the AUD. A decline in US Treasury yields contributed to the USD's slide. Market participants are now eyeing the upcoming US ADP Employment Change, ISM Services PMI for June, and the FOMC Minutes for further guidance.
Fed Chair Jerome Powell signaled a cautious approach to interest rate cuts, indicating that more evidence of economic cooling is needed. Despite acknowledging a return to a disinflationary path, Powell's comments added to the pressure on the US Dollar.
In Australia, the Reserve Bank of Australia's (RBA) June meeting minutes reflected a stronger case for holding interest rates steady due to inflation risks. The RBA's Index of Commodity Prices fell by 4.1% year-on-year in June, the smallest decline in 16 months. Additionally, the Melbourne Institute's Monthly Inflation Gauge rose by 0.3% in June, maintaining the pace from May and fueling speculation of a potential rate hike in August.
China's economic data also impacted the AUD, with the Services PMI dropping from 54.0 in May to 51.2 in June, below market forecasts. Any major policy shifts by the People's Bank of China (PBOC) could significantly influence the Australian Dollar due to the strong trade relationship between the two nations.
On the technical front, the AUD/USD pair traded around 0.6670. The pair is poised to test resistance at 0.6680 and potentially 0.6700, while support is found at 0.6630 and the 50-day Exponential Moving Average at 0.6625.
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.
FOLLOWME Trading Community Website: www.followme.com
Load Fail()