The AUD/USD pair sets a third consecutive day of gains, rising more than 0.60% towards 0.6470. PMIs from August from the US and Australia came in lower than expected.
Dovish bets on the Fed are applying pressure on the USD. The AUD/USD gained traction in Wednesday’s session, driven by a weaker USD. The US reported lower-than-expected PMIs, but its Services sector remained resilient. At the same time, the Australian figures also failed to live up to expectations, eyes on Jerome Powell’s speech on Friday.
Weak US PMIs fueled a decline in US yields, which weakened the US dollar. The US S&P Global PMIs arrived weaker than anticipated. The Manufacturing PMI fell to 47, contrasting with the projected 49.3, whereas the Services index, though below expectations, stayed within the expansion range at 51. Despite reporting soft data, the US Service sector remains resilient.
At the same time, the British, German, and Australian Services index dropped below 50, and the USD may gain further traction as the US economy seems to be the last man standing.
Reacting to the weak economic activity data, the 2, 5, and 10-year US Treasury yields show sharp declines of more than 1.50%, suggesting that the markets are betting that the Fed won’t be as aggressive as expected for the rest of the year.
Tags aud/usd FED pmi data powell
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