- AUD/USD has recaptured the 0.6700 resistance as China announces stimulus to offset weaker economic projections.
- A significant recovery in investors’ risk appetite has dragged the USD Index to near 106.20.
- This week, US ADP Employment and Caixin Manufacturing PMI will be of utmost importance.
The AUD/USD pair has witnessed a sheer responsive buying action after dropping to near 0.6640 in the Tokyo session. The Aussie dollar has gained significant strength and has managed to push the asset above the round-level hurdle of 0.6700. Investors’ risk appetite has improved sharply as Chinese marshals are working on restricting protests from individuals against Covid-19 lockdown measures.
The US Dollar index (DXY) has dropped sharply to near 106.20 as the risk aversion theme is losing its grip quickly. Meanwhile, S&P500 futures have extended their recovery. The 10-year US Treasury yields have overstepped the critical hurdle of 3.70% amid anxiety ahead of the speech from Federal Reserve (Fed) chair Jerome Powell, which is due on Wednesday.
The speech from the Fed chair will provide cues about the likely monetary policy action in December monetary policy meeting. Also, it will trim obscurity over the chatters about a deceleration in the interest rate hike pace.
Apart from that, investors will focus on the release of the United States Automatic Data Processing (ADP) Employment data. Per the projections, the US labor market has been added with 200K fresh jobs vs. the prior release of 239K.
Meanwhile, the Australian Dollar has picked significant bids as China has announced fresh stimulus to offset concerns over economic projections due to fresh Covid-19 lockdown measures. As China's leading trading partner, the fresh stimulus will also bring more business to the Australian economy.
Going forward, investors will keep an eye on Thursday’s Caixin Manufacturing PMI data, which is seen lower at 48.6 vs. the prior release of 49.2.
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 extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.