AUD/USD licks its wounds near 0.6700 after downbeat Aussie PMIs

• AUD/USD stabilizes, holds lower grounds, after falling the most in 33 months.
• Preliminary S&P Global PMIs for Australia came in softer for December.
• Central bank moves, downbeat China data amplified risk-aversion and underpinned US Dollar demand.
• US PMIs, risk catalysts will be in focus for fresh impulse.

AUD/USD stays depressed around 0.6700, after falling the most since March 2020, as risk-aversion joins downbeat Aussie data. That said, the Australian Dollar’s latest weakness could be linked to the softer activity numbers for the nation published early Friday morning in the Asia-Pacific region.

The preliminary readings of the S&P Global PMIs for Australia showed an overall decline in December. That said, the headlines Manufacturing PMI dropped to 50.4 from 51.3 prior while Services PMI fell to 46.9 versus 47.6. Further, the Composite PMI also weakened to 47.3 from 48.0 previous readings.

It’s worth noting that the hawkish central bank actions joined the downbeat China data and superseded the mostly upbeat Aussie jobs report to drown the AUD/USD prices the previous day.

That said, the US Federal Reserve, Bank of England, Swiss National and the European Central Bank all of them announced a 0.50% rate hike and showed readiness to keep the higher rates for longer. The same raised fears of economic slowdown as forecasts concerning inflation and growth have been disappointing.

Additionally, China’s Retail Sales slumped to -5.9% in November versus -3.6% expected and -0.5% prior while Industrial Production came in at 2.2% compared to 3.3% market forecasts and 5.0% previous readings. Further, Australia’s Consumer Inflation Expectations dropped to 5.2% for December versus 5.7% expected and 6.0% prior while a jump in Employment Change and a static Unemployment Rate failed to impress the Australia Dollar (AUD).

It should be noted that the data from the US have been mixed and couldn’t provide any clear directions. That said, the US Retail Sales flashed -0.6% MoM figure in November versus 0.1% expected and 1.3% prior while manufacturing survey details from Philadelphia Fed and New York Fed came in disappointing for the said month. Further, Industrial Production eased in November and the Jobless Claims also dropped for the week ended on December 09.

Amid these plays, the Wall Street benchmarks closed in the red and the US Treasury yields regain upside momentum, which in turn underpinned the US Dollar’s demand and weighed on the AUD/USD.

Moving on, the first readings for the US S&P Global PMIs for December will be important for clear directions.

Technical analysis

A daily closing below an upward-sloping support line from November 21, now resistance near 0.6715, teases AUD/USD sellers. However, the 100-DMA support around 0.6670 challenges the immediate downside.