AUD/USD Sticks To Modest Recovery Gains Around 0.6525-30 Area Ahead Of US PCE Price Index

The AUD/USD pair stages a modest recovery from sub-0.6500 levels, or its lowest since November 2022, touched this Friday and sticks to its intraday gains through the first half of the European session. The pair is currently placed around the 0.6525-0.6530 region, up over 0.20% for the day, and for now, seems to have snapped a three-day losing streak.

The US Dollar (USD) bulls opt to take some profits off the table following the recent rally to over a two-month high and turn out to be a key factor lending some support to the AUD/USD pair. Meanwhile, the downside for the USD seems cushioned amid growing acceptance that the Federal Reserve (Fed) will keep interest rates higher for longer to combat sticky inflation. Apart from this, the prevalent cautious mood could benefit the Greenback’s relative safe-haven status and contribute to capping the upside for the risk-sensitive Aussie.

Against the backdrop of the recent hawkish remarks by several Fed officials, Thursday’s better-than-expected US macro data reaffirms market expectations that the US central bank will continue to tighten its monetary policy. The markets have started pricing for another 25 bps lift-off at the June FOMC meeting. This, in turn, pushed the yield on the rate-sensitive two-year US government bond to a two-and-half-month high on Thursday and supported prospects for the emergence of some dip-buying around the USD.

The market sentiment, meanwhile, remains fragile amid worries about a global economic slowdown and the US debt ceiling impasse. It is worth mentioning that both Democrats and Republican negotiators flagged little progress toward reaching a deal to raise the borrowing limit ahead of the early-June deadline when the federal government could run out of money. Moreover, Fitch placed its top-level “AAA” rating of the US on negative watch, while credit rating agency DBRS Morningstar put the US on review for a downgrade on Thursday.

Apart from this, speculations that the Reserve Bank of Australia (RBA) might refrain from hiking in June, bolstered by softer domestic data, suggests that the path of least resistance for the AUD/USD pair is to the downside. Hence, any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly. Traders now look to the US economic docket, highlighting the Core PCE Price Index release – the Fed’s preferred inflation gauge – and Durable Goods Orders later during the early North American session.

This Post Has One Comment

  1. sklep online

    Wow, wonderful blog layout! How lengthy have you ever been blogging for?
    you make running a blog glance easy. The total look of your website is
    wonderful, as well as the content material!
    You can see similar here ecommerce

Leave a Reply

Important Link

Fund Your Deriv Account
Withdraw Funds to Your Local Currency
VIP Trading Signals
Learn To Trade

Contact Us

Follow Us


Forex, Crypto, Options, and Binary Options have both large potential rewards and large potential risks. Therefore, before investing or trading any of the assets, ensure you are aware of and willing to accept the accompanying risks. Do not trade money you cannot afford to lose.

All Rights Reserved. None of the content of this website can be published elsewhere by any means without the prior consent of the owner(s). Please, check our terms & conditions and privacy policy before continuing to use this website.

This website and its owner(s) are not in any way liable for any incurred loss, whether caused by the information provided on this website or otherwise. The use of this website, including the content and information provided, is the user’s sole liability.