- AUD/USD recovers to 0.6571 after dipping, despite central bank actions.
- BoJ hikes, SNB cuts rates, and other central banks are steady.
- Mixed US data: manufacturing up, services, and composite PMIs down.
- Market eyes June Fed cut, post-steady rate projections.
The Australian Dollar (AUD) tumbled against the US Dollar (USD) on Thursday despite refreshing weekly highs at 0.6634, printed losses of 0.25%. However, as Friday’s Asian session begins, the AUD/USD exchanges hands at 0.6571, virtually unchanged as traders brace for the weekend.
Australian Dollar holds near weekly lows amid mixed global monetary policy moves
A tranche of central banks adjusted their monetary policy throughout the weekend, led by the Bank of Japan, the Reserve Bank of Australia, the Federal Reserve, the Bank of England and the Swiss National Bank. Most of them kept rates unchanged, being the outliers of the BoJ and the SNB. The former raised rates for the first time in almost two decades, while the latter was the first major central bank to cut interest rates.
Data-wise, the US economic schedule featured March S&P Global PMIs, with the services and the composite index, missing estimates but standing at expansionary territory. On a positive note, manufacturing activity accelerated to its fastest pace in almost two years. Elsewhere, the US labor market continued to show signs of tightness despite the recent withholding according to February’s Nonfarm Payrolls figures. Initial Jobless Claims for the week ending March 16 fell to 210k versus 212k the week prior.
Aside from this, market participants seem convinced they overreacted post-Federal Reserve’s decision to withhold the federal funds rate (FFR) unchanged at the 5.25%-5.50% range. The Fed Dot-Plots failed to deliver a hawkish stance, keeping three cut rates on the table for 2024, spurring a jump in interest rate cut expectations for June, which sit at around 80%.
On the Aussie’s front, the docket is empty, though proxies like the data from New Zealand would feature the Balance of Trade and Japan’s Consumer Price Index (CPI) for February.
