AUD/USD hovers around 0.7500 amid awful Chinese PMIs, oil price slump

• AUD/USD is struggling to resist above 0.7500 amid disappointing China’s PMIs.
• Risk-aversion, sell-off in commodities price limit aussie bulls.
• The US dollar licks its wounds amid poor data, weaker yields and Ukraine hopes.

AUD/USD remains on a slippery slope around 0.7500 so far this Thursday, having failed to find acceptance above the latter amid broad risk-aversion.

The higher-yielding aussie bears the brunt of a contraction in the Chinese Manufacturing and Services PMIs. It’s the first time since September 2020 that both indicators have contracted together.

The official manufacturing Purchasing Managers' Index (PMI) fell to 49.5 from 50.2 in February, the National Bureau of Statistics (NBS) said, while the non-manufacturing PMI eased to 48.4 from 51.6 in February.  

Concerns over the Chinese economic slowdown amid the latest covid outbreaks coupled with soaring inflation worldwide are sapping investors’ confidence. This is helping put a fresh bid under the US dollar, as it licks its wound after Wednesday’s huge sell-off, triggered by a steep correction in the Treasury yields across the curve. A slowdown in the US ADP jobs creation and a downward revision to the Q4 GDP collaborated with the downside in the dollar.

Additionally, a slump in oil prices is leaving AUD/USD vulnerable to the additional downside. WTI prices crashed over 4% after Reuters reported that US President Joe Biden's team is weighing a massive oil release to combat inflation. The total release may be as much as 180 million barrels, the sources said.

Next of relevance for the major remains the US PCE inflation data and the incoming updates on the Ukraine conflict, as the peace talks are likely to resume online on April 1.

AUD/USD: Technical levels to consider