AUD/USD remains sideways above 0.6600 despite an overall improvement in Aussie PMI data

• AUD/USD has remained muted despite the release of the Aussie PMI data.
• Manufacturing PMI has released at 53.9 vs. estimates of 54.0 while Services PMI has landed at 50.4 vs. 47.7.
• The DXY could witness a momentum loss ahead of US PMI numbers.

The AUD/USD pair has not responded effectively to the release of the Australian S&P Global PMI data. The asset has continued to trade sideways around 0.6640. Earlier, the major rebounded firmly after picking significant bids below 0.6580.

The Australian S&P Manufacturing PMI has landed in mid of expectations of 54.0 and the prior release of 53.8 at 53.9. While the Services PMI has remained upbeat, released at 50.4, significantly higher than the forecasts of 47.7 and the former release of 50.2.

On a broader note, the aussie bulls have remained in the grip of bears after the release of less-hawkish Reserve Bank of Australia (RBA) minutes. RBA Governor Philip Lowe and his colleagues were also considering the alternative of 25 basis points (bps) for a rate hike.

This indicates that the central bank is not aggressive in hiking its Official Cash Rate (OCR). No doubt, price pressures are also high in the antipodean region but the central bank is not ready to sacrifice the growth rate over inflation. Apart from that, the reason for also discussing the 25 bps rate could be that the conduct of monetary policy every month provides sufficient chances for the central bank to paddle up interest rates.

Meanwhile, the US dollar index (DXY) is expected to display some signs of momentum loss on the upside. The DXY printed a fresh two-decade high of 111.80 on Thursday after a harsh-than-expected tone by the Federal Reserve (Fed) on interest rate guidance. The DXY could witness some long liquidation as the US PMI is expected to display a mixed performance.

The Manufacturing PMI is seen lower at 51.1 vs. the prior release of 51.5. While the Services PMI will improve to 45.0 against the prior print of 43.7.