- AUD/USD climbs despite upbeat economic data in the United States suggesting further Federal Reserve tightening is needed.
- FOMC’s minutes were hawkish and emphasized the need for higher for longer.
- Initial Jobless Claims dropped in the latest week, while the US economy expanded in Q4 2022.
AUD/USD recovered some ground on Thursday after falling to fresh February lows at 0.6803, though it recovered some ground, despite overall US Dollar (USD) strength across the board. A risk-on impulse is another reason that it’s underpinning the Australian Dollar (AUD). At the time of typing, the AUD/USD exchanges hands at 0.6826, above its opening price by 0.39%.
AUD/USD to remain pressured after latest FOMC minutes, US data
US equities have opened in the green after the Federal Reserve Open Market Committee (FOMC) revealed its minutes. The minutes were slightly hawkish, with some officials pushing for a 50 bps rate hike, though all agreed to raise 25 bps. Policymakers remained worrisome about the tightness of the labor market and commented that growth risks are skewed to the downside. Also, they commented on financial conditions for the first time. According to the Chicago Fed National Financial Conditions Index, conditions remained the loosest since February 2022. This could trigger some attention from Fed officials at subsequent meetings.
The US Dollar strengthened after the release of the latest meeting minutes. That sent the AUD/USD to new February lows, though the AUD/USD is erasing some of its Wednesday losses on Thursday.
Data from the United States (US) portrayed the tightness of the labor market after the Department of Labor (DoL), revealed Initial Jobless Claims for the week ending on February 18. The claims rose by 192K, below the 200K estimated and beneath the last week’s 194K. In a separate report, the US Department of Commerce (DoC) featured the US Gross Domestic Product (GDP) for Q4 on its second estimate came at 2.7%, below the prior’s reading of 2.9%.
The US Dollar Index (DXY), which tracks the buck’s value vs. six currencies, slides 0.01% at 104.85, the reason for the latest uptick in the AUD/USD pair.
In the meantime, Private Capital Expenditure in Australia rose 2.2% in Q4 2022, higher than Q3’s data at 0.6% QoQ.
AUD/USD Technical analysis
The AUD/USD is testing the 100-day Exponential Moving Average (EMA) at 0.6829, which, once cleared, will pave the way for further upside toward the 200-day EMA at 0.6859. Nevertheless, the Relative Strength Index (RSI) at bearish territory and the EMA above could cap the AUD/USD rally, which would put into play the 0.6800 figure. Therefore, the AUD/USD downtrend is intact, and it could shift neutral if buyers reclaim the 200-day EMA.
What to watch?
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
Gold gives away some gains, slips back to $2,980
Gold retraced from its earlier all-time highs above the key $3,000 mark on Friday, finding a footing around $2,980 per troy ounce. Profit-taking, rising US yields, and a shift to a risk-on environment seem to be putting the brakes on further gains for the metal.
EUR/USD remains firm and near the 1.0900 barrier
EUR/USD is finding its footing and trading comfortably in positive territory as the week wraps up, shaking off two consecutive daily pullbacks and setting its sights back on the pivotal 1.0900 mark—and beyond.
GBP/USD remains depressed, treads water in the low-1.2900s
GBP/USD is holding steady in consolidation territory after Friday’s opening bell on Wall Street, hovering in the low-1.2900 range. This resilience comes despite disappointing UK data and persistent selling pressure on the USD.
Crypto Today: BNB, OKB, BGB tokens rally as BTC, Shiba Inu and Chainlink lead market rebound
Cryptocurrencies sector rose by 0.13% in early European trading on Friday, adding $352 million in aggregate valuation. With BNB, OKB and BGB attracting demand amid intense market volatility, the exchange-based native tokens sector added $1.9 billion.
Week ahead – Central banks in focus amid trade war turmoil
Fed decides on policy amid recession fears. Yen traders lock gaze on BoJ for hike signals. SNB seen cutting interest rates by another 25bps. BoE to stand pat after February’s dovish cut.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.