In a calm US Dollar environment, the Australian Dollar awaits US PMI data eagerly. Despite improved PMI figures, the AUD weakens. Manufacturing and Services PMI rise to 50.3 and 47.9, respectively. The Australian share market offers some support, but persistent US Dollar demand prevails due to geopolitical tensions, notably strikes on the Iran-backed Kataib Hezbollah militia in Iraq.
Despite better PMIs, the Australian Dollar faces challenges. Articles by Akhtar Faruqui and Christian Borjon Valencia highlight AUD/USD’s modest gains. Joshua Gibson notes Judo Bank Composite PMI Output Index reaching a four-month high of 46.9 in January.
Technically, AUD/USD hovers at 0.6580, eyeing 0.6600 resistance. A breakthrough may lead to a major barrier at 0.6650. Conversely, revisiting the weekly low at 0.6551 may occur, with a break pushing the pair to retest the monthly low at 0.6524.
Fundamentally, the Australian Dollar retraces gains despite improved PMIs. Manufacturing PMI rises from 47.6 to 50.3, Services PMI from 47.1 to 47.9, and Composite PMI to 48.1. Australian shares hit a record high, favoring the AUD/USD pair.
Meanwhile, the stable US Dollar Index maintains a positive position amidst Middle East geopolitical tensions. Traders await crucial S&P Global PMI data from the United States, influencing market sentiments about the Federal Reserve’s interest rate trajectory.
Conclusion:
In the money market, futures reduce the likelihood of a Fed rate cut in March. By May, there’s a full pricing in of a 25 basis point cut, with a 50% probability of a more substantial 50 bps cut. As tensions persist, staying informed is key for traders. Explore 4xPip for expert guidance and innovative trading tools at 4xpip. Contact [email protected] for more information on automation, Expert Advisors, and risk management solutions.
FAQs:
Why did the Australian Dollar weaken despite improved PMI figures?
Despite rising PMIs, persistent demand for the US Dollar prevailed due to geopolitical tensions and strikes in Iraq.
What challenges does the Australian Dollar face, as mentioned in the articles?
The AUD faces challenges highlighted in articles by Akhtar Faruqui, Christian Borjon Valencia, and Joshua Gibson.
What are the technical levels for AUD/USD, and what factors may influence its movement?
AUD/USD hovers at 0.6580, eyeing resistance at 0.6600. Geopolitical tensions and S&P Global PMI data influence movements.
How does the money market view Fed rate cuts, and what does it indicate for traders?
Futures reduce the likelihood of a March cut but fully price in a 25 bps cut by May. Stay informed with 4xPip.
