AUD/USD finds support near 0.6760 amid US Dollar’s less-confident recovery, Aussie PMI eyed

• AUD/USD has sensed buying interest near 0.6760 as the short-lived pullback in the USD index is concluding.
• Dovish commentary from Fed policymakers has receded the impact of hawkish Fed chair Jerome Powell’s testimony.
• Australian preliminary S&P PMI (June) data will remain in the spotlight.

The AUD/USD pair has found an intermediate support around 0.6760 in the European session. The Aussie asset remained in the bearish territory as the Australian Dollar was going through a rough phase after the release of less-hawkish Reserve Bank of Australia (RBA) minutes.

S&P500 futures have carry-forwarded losses posted in Asia to the London session, portraying caution in the risk profile. The US Dollar Index (DXY) is facing barriers after a short-lived recovery to near 102.16 as Federal Reserve (Fed) policymakers’ dovish commentary has receded the impact of hawkish Fed chair Jerome Powell’s testimony.

Meanwhile, the US treasury yields have also found support. At the press time, the 10-year US Treasury yields are hovering around 3.73%.

Investors are now focusing on the weekly Initial Jobless Claims data for the week ending June 16. The US Department of Labor has already reported higher-than-anticipated first-timer jobless claims straight for the past three weeks. Further jump in claims would convey that labor market conditions are easing further.

The Australian Dollar is consistently facing pressure as RBA minutes conveyed that policymakers were mixed about raising interest rates in June. Investors should note that Australian inflation rebounded strongly to 6.8%, which hinted at severe persistence. Also, labor market conditions have turned out tighter in May, which has cemented the chances of one more interest rate hike in July.

Going forward, Australian preliminary S&P PMI (June) data will remain in the spotlight, which will release on Friday. As per the preliminary report, Manufacturing PMI is seen declining to 48.1 vs. the prior release of 48.4. Services PMI is expected to drop sharply to 50.1 against the former release of 52.1.