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Australian dollar slides near 0.70 as US ISM PMI boosts the dollar
AUD/USD pulled back to around 0.7000 after US ISM Manufacturing PMI rose to 55.6 in July, with markets also watching upcoming US labor data.
The Australian dollar weakened against the US dollar, with AUD/USD trading around 0.7000 after reaching a daily high near 0.7050, according to FXStreet. The move came even as broader risk sentiment stayed supportive, as traders shifted toward the US dollar amid stronger US data.
FXStreet linked the dollar recovery to the July US ISM Manufacturing PMI, which rose to 55.6 from 53.3, its highest reading since 2022. The report also showed employment-related components suggesting hiring, while prices paid pointed to elevated input costs, leaving markets to weigh implications for interest rate expectations.
The update also highlighted that oil market dynamics eased expectations for higher Federal Reserve rates, as West Texas Intermediate fell more than 7.7% to about $80 a barrel. At the same time, FXStreet noted that market participants were digesting two days of FX intervention aimed at supporting the undervalued Japanese yen, which influenced cross-currency moves.
Looking ahead, FXStreet said the US economic calendar is set to be busy, with ADP Employment Change, JOLTS job openings, jobless claims, and Nonfarm Payrolls all scheduled. It also cited New York Fed President John Williams, who said policy is well positioned to return inflation to the 2% goal, and added that the Fed would consider higher rates if inflation is unlikely to move toward target.
In Australia, FXStreet said the Aussie initially opened stronger, but weakened as the yen crosses moved lower. The article also pointed to technical levels around 0.7000, with resistance near the area of the combined 50-, 100-, and 200-day moving averages.