Australian Dollar hovers below a psychological level amid a softer Aussie GDP

• Australian Dollar recovers intraday losses because the ASX 200 Index improves on Wednesday.
• Australian GDP (QoQ) grew by 0.2%, just below the expected 0.3% in the fourth quarter of 2023.
• Commonwealth Bank of Australia reiterated its expectation of 75 bps price cuts in 2024 after old trend GDP data.
• US ISM Companies PMI declined to 52.6 against the forecasted 53.0 for February.
• US Dollar positive aspects floor on higher US Treasury yields.

The Australian Dollar (AUD) recovers intraday losses despite a softer GDP on Wednesday. Nonetheless, the AUD confronted downward stress sooner or later of early Asian hours amid a weaker fairness market. The S&P/ASX 200 Index has declined for three consecutive classes, mirroring the sell-off in abilities stocks on Wall Dual carriageway and decrease mining stocks.

Australian Dollar remained largely unaffected by the softer-than-expected Immoral Home Product (GDP) data. The GDP grew by 0.2% quarter-on-quarter in the fourth quarter of 2023, just below market expectations of no trade at 0.3%. Nonetheless, on a Twelve months-on-Twelve months foundation, GDP expanded by 1.5%, surpassing the expected 1.4%, but falling brief of the old growth of two.1%.

The Reserve Bank of Australia (RBA) continues to track the financial system for signs of a slowdown, aiming to lift inflation encourage to accommodate. It anticipates a additional moderation in financial growth to 1.3% by June 2024.

The US Dollar Index (DXY) makes an try to stop its three-day losing whisk, buoyed by the restoration in US Treasury yields sooner than Federal Reserve (Fed) Chairman Jerome Powell’s testimony sooner than the US Congress’ Home Financial Companies Committee scheduled for Wednesday and Thursday. Nonetheless, the US Dollar (USD) faces downward stress following softer-than-expected data from the US ISM Companies Shopping Managers Index (PMI). ADP Employment Change for February will be eyed on Wednesday.

Daily Digest Market Movers: Australian Dollar improves on possibility-on sentiment

• AiG Substitute Index reported a print of -14.9 for January, compared to the -27.3 prior.
• AiG Constructing PMI prolonged its contraction, declining to -18.4 from the old studying of -11.5.
• AiG Manufacturing PMI posted a studying of -12.6 against the old contraction of -23.8.
• Judo Bank Companies PMI surged to a ten-month high of 53.1 in February. This safe bigger pushed the index above the 50.0 threshold, indicating expansion, and surpassed the old studying of 49.1.
• Judo Bank Composite PMI rose to 52.1 compared to the old 49.0, marking a nine-month high.
• Australian Most in trend Sage Balance rose to 11.8 billion in the fourth quarter of 2023, against the expected 5.6 billion and 1.3 billion prior.
• ANZ-Roy Morgan Australian User Self assurance index declined to 81.0, from the old studying of 83.2. This most modern figure represents the bottom level recorded thus a long way in 2024.
• Australia Melbourne Institute Inflation for February confirmed a Twelve months-over-Twelve months rise of 4.0%, decrease than the old rise of 4.6%.
• Commerzbank economists watch for that the Reserve Bank of Australia (RBA) will extend price cuts, providing help for the Australian Dollar (AUD) for the time being. They invent no longer foresee an impending slowdown in the Australian financial system. Nonetheless, if obvious indications of a slowdown emerge, presumably signaling a recession, the RBA would possibly presumably adjust its monetary policy stance sooner.
• Per Matthew De Pasquale, an Economist at Judo Bank, the February Companies PMI means that the sphere has done a cozy touchdown in 2023 and is now witnessing a resurgence in exercise in early 2024. While the resilience in enterprise exercise bodes effectively for financial growth and employment, it casts doubt on the likelihood of inflation returning to accommodate contained in the Reserve Bank of Australia’s forecast timeline.
• Primitive Unusual York Fed economist Steven Friedman infamous that Federal Reserve policymakers have a tendency to remain cautious about reducing ardour charges this Twelve months attributable to staunch growth and volatile inflation. He expected the different of fewer than the three cuts anticipated for 2024.
• Atlanta Federal Reserve (Fed) President Raphael Bostic made headlines on Monday, expressing uncertainty about achieving a cozy touchdown. He would not foresee consecutive price cuts when they commence but expects two 25-foundation point price cuts in 2024. While inflation is expected to come to the 2% target, Bostic believes it’s untimely to voice victory.
• Per the CME FedWatch Instrument, there is a 4.0% likelihood of a 25 foundation capabilities price decrease in March, while the likelihood of cuts in Could also and June stands at 23.9% and 53.3%, respectively.
• ISM Companies PMI declined to 52.6 in February, against the forecasted downtick to 53.0 from 53.4.
• Manufacturing facility Orders (MoM) reduced by 3.6% in January, exceeding the expected drop of two.9%.
• S&P Global Composite PMI (Feb) increased to 52.5 from the old studying of 51.4.
• US ISM Manufacturing PMI (Feb) dropped to 47.8 from 49.1, surprisingly missing the market expectation 49.5.
• The US Michigan User Sentiment Index declined to 76.9 in February, falling below the market expectation of ultimate unchanged at 79.6.
• US Personal Consumption Expenditure (PCE) Imprint Index grew by 2.4% YoY in January, against the 2.6% prior, in step with the market expectation. The index increased by 0.3% month-over-month, against 0.1% prior.

Technical Diagnosis: Australian Dollar strikes above the psychological level of 0.6500

The Australian Dollar traded around 0.6490 on Wednesday. Quick resistance is infamous shut to the psychological level of 0.6500. A atomize above this level would possibly presumably help the AUD/USD pair to be triumphant in the 21-day Exponential Transferring Realistic (EMA) at 0.6529, followed by the 23.6% Fibonacci retracement level at 0.6543 and the fundamental level of 0.6550. On the shrink back, key assistance is considered at the old week’s low at 0.6486. If breached, the pair would possibly presumably target the home around the fundamental help level of 0.6450 and February’s low at 0.6442.

AUD/USD: Daily Chart