AUD/USD slides towards 0.7000 as unimpressive China data joins RBA, Fed concerns
- AUD/USD renews intraday low amid sour sentiment, mixed data.
- China Caixin PMI fails to overcome 50.0 mark despite improving in January.
- Mixed concerns over RBA’s next move, especially after strong inflation and downbeat Retail Sales, weigh on Aussie prices.
- Cautious mood can weigh on risk-barometer pair ahead of Fed’s verdict.
AUD/USD takes offers to refresh intraday low around 0.7040 as the market’s anxiety ahead of the key Fed verdict amplifies during early Wednesday. Adding strength to the pullback moves could be the Chinese activity data from the industry group.
That said, China’s Caixin Manufacturing PMI rose to 49.2 versus 49.0 prior but eased below 49.5 market forecasts. Also, the below 50 readings for the sixth consecutive month adds strength to the bearish bias surrounding Australia’s biggest customer.
Elsewhere, RBA’s Head of the Economic Analysis Department Marion Kohler mentioned that the bank believes inflation peaked in Q4 of 2022. On the contrary, James Glynn from Wall Street Journal (WSJ) mentioned that the RBA is set to deliver a string of hikes and keep guidance hawkish during the next week’s monetary policy meeting.
It should be observed that the market sentiment turns sour after upbeat data as traders brace for today’s key Federal Open Market Committee (FOMC) monetary policy meeting amid receding fears of inflation and stagnant recession woes. Also making today’s Fed meeting interesting is Fed Chair Jerome Powell’s hawkish stand and readiness to defend the aggressive rate hikes even if the latest inflation cursors have been downbeat.
Against this backdrop, the S&P 500 Futures prints mild losses while the US Treasury bond yields remain sluggish and pause the previous day’s pullback. That said, the US Dollar Index (DXY) picks up bids to reverse Tuesday’s losses around 102.15.
Moving on, the Fed’s 0.25% rate hike is already given but Fed Chair Powell’s speech will be crucial.
Technical analysis
A daily closing below the one-month-old ascending trend line, around 0.7015 by the press time, becomes necessary to convince AUD/USD bears.