- AUD/USD is rising as market participants await a turnaround from the Federal Reserve on monetary policy.
- Susan Collins of Boston H argues that H rates will hold firm after a future hike.
- Thomas Barkin of the Richmond Fed says the turmoil at Credit Suisse has removed the possibility of a 50 basis point hike.
The Australian dollar (AUD) against the US dollar (USD), which continues to weaken overall, as the basket of six currencies, shows the dollar index. Additionally, US Treasury yields and US stocks are rising, which paints a difficult picture for the US currency. At the time of writing the AUD/USD pair is trading at 0.6701.
The dollar weakened in US bond yields after a slide in weak employment data
Risk appetite remains the main driver after the problems of the banking crisis eased. The financial markets are telling that once again central banks are focused, although not on growth, but on regulation. However, federal officials such as Boston H president Susan Collins and Thomas Barkin made briefings in Richmond and discussed the financial plan.
Susan Collins of the Boston H said getting low inflation justifies not lowering rates. He added that the United States Federal Reserve (H) will maintain stability after the new hike. Richmond Fed President Thomas Barkin commented that the fight against inflation would take some time and that the turmoil at Credit Suisse ruled out the possibility of a 50 basis point hike.
Although H officials were so slightly hawkish, investors began to price no change in the Funds Fis Rate (FFR) at the upcoming meeting in May. Therefore, the AUD/USD is expected to change due to the monetary status of the central bank’s USD, although the inflation data will be released on Friday.
On top of that, US jobs data shows the job market is warming, with initial jobless claims last week beating estimates. At the same time, US gross domestic product (GDP) for the quarter of 2022 was 2.6%, below forecasts of 2.7%.
On the Australian front, the latest inflation report surprised the market as inflation was lower than expected. Rumors among financial analysts have increased that the Reserve Bank of Australia (RBA) may delay paying purchases next week.
AUD/USD Technical Analysis
The AUD/USD pair is approaching the 20-day EMA at 0.6696, consolidating within a tight 70-point range for three trading days. Although the oscillators remain in unsustainable territory, like the Relative Strength Index (RSI), there is a Rate of Change (RoC) bubble. Therefore, mixed signals are warranted.
If AUD/USD breaks higher, it will have resistance from the 50 day EMA at 0.6753, followed by the 100 and 200 day EMAs at 0.6771 and 0.6821, respectively. On the other hand, the first level of demand for AUD/USD was likely to be the March 24 low at 0.6625, followed by the 0.6600 figure.