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forexAustralian dollar shrugs after strong data

Started by forex, binaryoptionsoftware.co.u, Mar 03, 2022, 01:18 pm

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Australian dollar shrugs after strong data

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PMIs, trade balance power higher


Australia posted strong data earlier in the day, but the Australian dollar remains almost unchanged as it trades around the 0.73 level.


Services PMI jumped to 57.4 in February, up from 46.6 in January. It was a similar story for Construction PMI, which climbed to 53.4, up from 45.9. The 50-level separates contraction from expansion, and the growth we are seeing in the services and construction sectors reflects an improvement in the economy. There was more good news as the trade surplus jumped to AUD 12.9 billion in January, up from AUD 8.8 billion beforehand, with exports rising by 8%. These positive numbers come on the heels of GDP for Q4, which rose 3.4%, after a decline of 1.9% in the third quarter.


The RBA has done its best to dampen rate fever, but if the economy continues to churn out strong numbers, Governor Lowe will be under pressure to raise rates earlier than expected.  Lowe has said that the RBA will not lift rates until inflation is sustainably within the bank’s target band of 2-3%, but the markets are expecting a number of rate hikes this year, perhaps  as early as June.


Powell says Fed will hike in March


The Fed is again in the spotlight, as Chair Jerome Powell testified on the Hill on Wednesday and will appear before lawmakers today as well. There had been some speculation that the outbreak of a war in Europe could force the Fed to delay a rate hike, but Powell removed any such doubts, stating that the hike would go ahead as planned. Powell’s comments suggested that the Fed will stick with the traditional 25-bps move rather than a massive half-point hike. The confirmation of a rate hike by Powell boosted US Treasury yields, and currently the 10-year yield is at 1.86%.


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AUD/USD Technical



  • There is resistance at 0.7313 and 0.7393

  • AUD/USD has support at 0.7124 and 0.7015



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