AUDUSD fails to get traction and is impacted by a number of variables.
On Friday, the AUDUSD pair lacks a clear intraday directional bise and oscillates between tepid gains and modest losses throughout the Asian session. Meanwhile, spot prices remain below the psychological level of 0.6500. And have moved little in response to Chinese macro data.
Caixin’s better-than-expected performance China’s Manufacturing PMI disappoints bulls ahead of the NFP.
According to a Caixin-sponsored poll, business activity in China’s manufacturing sector returned to expansion zone in August. Defying forecasts for a drop for the second month in a row. . In reality, the Caixin China Manufacturing PMI increased to 51.0 from 49.2 in July. Although this does nothing to alleviate concerns about the world’s second-largest economy’s deteriorating prospects. This, in turn, fails to offer any major momentum to the China-proxy Australian Dollar (AUDUSD). Despite a little drop in the US Dollar (USD) lending support to the AUDUSD pair.
The USD Index (DXY), which measures the value of the US dollar against a basket of currencies, is struggling to build. On the previous day’s robust rebound from a two-week low due to uncertainty over the Federal Reserve’s (Fed) future rate-hike path. The US macro statistics released earlier this week – the ADP report and the second estimate of Q2 GDP – hinted. That the strong US economy was losing speed. Nonetheless, Thursday’s US PCE Price Index data maintains the door open for another 25 basis point Fed rate rise by the end of the year.
US PCE Price Index increased by 3.3% year on year.
In reality, the headline US PCE Price Index increased by 3.3% year on year in July, up from 3% the prior month. Furthermore, the annual Core PCE Price Index – the Fed’s preferred measure of inflation – increased. At a little faster rate than the 4.1% increase reported in June. Personal Income increased by 0.2%. While Personal Spending increased by 0.8% on a monthly basis. The highest reading since January. The USD bulls, on the other hand, prefer to sit out the carefully monitored US monthly employment figures.
The well publicized NFP report is set to be released later this year. Throughout the early North American session and will have a significant impact on the Fed’s policy stance. This, in turn, will fuel USD demand and provide the AUDUSD pair some much-needed push. Nonetheless, spot prices are likely to conclude in the green for the first time in six weeks. As attention focuses to the RBA policy decision next Tuesday.
