AUD/USD rebounds from 0.6730 ahead of preliminary Australian S&P PMI
20.04.2023, 22:07

AUD/USD rebounds from 0.6730 ahead of preliminary Australian S&P PMI

  • AUD/USD has shown a rebound from 0.6730 as the upside in the USD Index looks capped.
  • An increase in US weekly jobless claims indicates that labor market conditions are not tight enough for now.
  • The Australian Dollar has shifted into a bullish trajectory as PBoC is ready to implement a prudent monetary policy.

The AUD/USD pair has shown a decent recovery after a corrective move to near 0.6730 in the early Asian session. The Aussie asset displayed a steep rise on Thursday after Zou Lan, head of monetary policy, at People Bank of China (PBOC) reaffirmed on Thursday that the central bank “will continue implementing prudent monetary policy.”

S&P500 witnessed a steep fall on Thursday after Tesla failed to cheer market participants from its quarterly earnings. The 500-US stock basket delivered a third consecutive bearish closing, portraying a risk aversion theme. Electric Vehicle (EV) maker Tesla reported the lowest quarterly gross margins in two years as the firm is on the path of slashing rates. The firm signaled that more price declines are in pipeline.

The US Dollar Index (DXY) showed a wild gyration in the 101.63-102.13 range and went back inside the woods. The release of the weekly jobless claims confirmed that United States labor market conditions are loosening swiftly and firms are postponing their recruitment plans. As per the report, weekly jobless claims increased to 245K, higher than the consensus and the former release of 240K for the week ending April 14.

The Australian Dollar shifted into a bullish trajectory as PBoC is ready to implement a prudent monetary policy, whenever required, to support the overall demand. Earlier, the PBoC announced an unchanged policy as the Chinese economy is well on track for economic recovery. It is worth noting that Australia is a leading trading partner of China and a quick economic recovery in China will also strengthen the Australian Dollar.

Going forward, preliminary Australian S&P PMI data will be keenly watched. As per the consensus, Manufacturing PMI will drop to 48.8 from the former release of 49.1.

 

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