- AUD/USD recovers vertically from 0.6490 as the US Dollar turns subdued.
- The market participants hope that the Fed will announce a rate cut in June.
- Upbeat Caixin Manufacturing PMI improves the appeal of the Australian Dollar.
The AUD/USD pair delivers a V-shape recovery from 0.6490 as investors hope the Federal Reserve (Fed) will start reducing interest rates from the June policy meeting. The Aussie asset recovers sharply as the US Dollar comes under pressure.
There is a mixed action in the global market as S&P 500 futures are down in the European session while risk-perceived currencies are performing better against the US Dollar. The US Dollar Index, which measures the US Dollar’s value against six rival currencies, falls slightly to 104.00.
Market expectations for rate cuts by the Fed in the June meeting remain firm as the annual core inflation data grew at the slowest pace of 2.8% in their years. However, the Federal Reserve (Fed) is still not ready to unwind the restrictive policy stance sooner as they need more confidence that inflation will return to the 2% target.
Fed policymakers want to analyze more data to confirm whether January’s high inflation data was a one-time blip or price pressures are flaring up again.
Going forward, market participants will look to the United States Manufacturing PMI data for February, which will be published at 15:00 GMT.
Meanwhile, the Australian Dollar performs stronger on February's upbeat Caixin Manufacturing PMI. Surprisingly, the economic data rose to 50.9 from expectations of 50.6 and the prior reading of 50.8. The Australian economy is China's leading trading partner, and an improvement in the latter's economic prospects eventually strengthens the Australian Dollar's appeal.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
![EUR/USD hovers around 1.1050 amid US Dollar softness](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/usd-eur-banknotes-58361490_XtraSmall.jpg)
EUR/USD hovers around 1.1050 amid US Dollar softness
EUR/USD is defending bids at around 1.1050 in the European session on Wednesday. The pair stays supported due to soft US PMI data-led US Dollar weakness. Risk-aversion, however, could cap the pair's upside ahead of US JOLTS Job Openings data.
![GBP/USD stays pressured near 1.3100 amid downbeat mood](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/strong-pound-weak-dollar-17536259_XtraSmall.jpg)
GBP/USD stays pressured near 1.3100 amid downbeat mood
GBP/USD is under pressure near 1.3100 in European trading on Wednesday. The pair struggles to capitalize on the US Dollar's weakness amid a risk-averse market atmosphere. All eyes turn to the US jobs data after the ISM Manufacturing PMI miss.
![Gold extends losses despite global market sell-off](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/safe-investment-gm147322399-17568598_XtraSmall.jpg)
Gold extends losses despite global market sell-off
Gold trades marginally lower on Wednesday, exchanging hands in the $2,490s. Market sentiment remains negative after the global sell-off triggered by the release of weak US manufacturing data on Tuesday, and fears about the AI tech bubble bursting.
![Canada Interest Rate Decision Preview: BoC expected to cut interest rates by 25 bps on September 4](https://editorial.fxstreet.com/images/Macroeconomics/CentralBanks/BOC/Bank_of_Canada_2016_XtraSmall.jpg)
Canada Interest Rate Decision Preview: BoC expected to cut interest rates by 25 bps on September 4
There is widespread expectation that the BoC will lower its policy rate for the third consecutive meeting on September 4. Mirroring previous decisions by the central bank, this move would most likely be of 25 basis points, taking the benchmark interest rate to 4.25%.
![Bitcoin continues its downtrend](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/cryptocurrenciesusd_XtraSmall.jpg)
Bitcoin continues its downtrend
Bitcoin (BTC) and Ripple (XRP) prices are approaching their key support levels; closing below suggests a decline ahead. At the same time, Ethereum (ETH) also trails Bitcoin’s path as it nears the $2,300 level, with a break below this level indicating a bearish trend ahead.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.