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AUD/USD bears stay static in dominant position below 0.6800, US NFP, RBA eyed

  • AUD/USD holds lower ground after refreshing multi-day bottom, pauses three-week fall.
  • Grim concerns surrounding China, downbeat data in the home lead the bears.
  • Strong yields, upbeat US statistics propel hawkish Fed bets and underpin US dollar demand.
  • No major data in the home but US jobs report for August will undoubtedly be crucial before next weeks RBA.

AUD/USD licks its wounds at the cheapest levels since mid-July as traders await the main element US jobs report during early Friday morning in Asia. In doing this, the Aussie pair pauses the three-day downtrend while taking rounds to 0.6780-90 lately.

As well as the strong run-up in america Treasury yields, grim concerns from China and downbeat Aussie data offered a supplementary bearish blow to the AUD/USD prices. Having said that, the pairs latest inaction could possibly be from the pre-event anxiety.

A covid-led lockdown in Chinas Chengdu city joins downbeat Caixin Manufacturing PMI to portray grim conditions for the worlds second-largest economy. On a single line may be the escalating geopolitical tension between Beijing and Washington, via Taiwan.

In the home, the ultimate readings of Australias S&P Global Manufacturing PMI for August dropped below 54.5 initial estimates to 53.8. Before that, the nations AiG Performance of Manufacturing Index marked the initial activity contraction in seven months with 49.3 numbers, versus 52.5 prior, for the said month.

It ought to be noted that the firmer prints of the united states ISM Manufacturing PMI and the final prints of the S&P Manufacturing PMI for August joined hawkish Fedspeak to propel the bets on the Feds next big rate hike, which fuelled the united states Treasury yields towards the new multi-month top.

THE UNITED STATES ISM Manufacturing PMI reprinted the 52.8 figure for August versus the marketplace expectations of 52.0. Further, the ultimate reading of S&P Manufacturing PMI for August rose past 51.3 initial estimates to 51.5, versus 52.2 prior final for July. On a single line, US Initial Jobless Claims dropped to 232K versus 248K forecast and 237K prior. Further, the machine Labor Cost rose 10.2% QoQ through the second quarter (Q2) versus 10.7% expected while Labor Productivity dropped by 4.1% during Q2 versus the anticipated fall of 4.5% and -4.6% prior.

Elsewhere, Atlanta Fed President Raphael Bosticsaid that the Fed has work related to inflation, a ‘long way’ from 2%. Also, the newly appointed Dallas Fed President Lory Logan joined the lines of hawkish fellow US central bankers while saying, Restoring price stability is not any. 1 priority.

Amid these plays, Wall Street closed mixed however the US 10-year Treasury yields rose to the best levels since late June. Moreover, the 02-year counterpart jumped to the 15-year top.

Excited, the markets will probably witness anxiety prior to the key US Nonfarm Payrolls (NFP) and Unemployment Rate for August, expected 300K and 3.5% versus 528K and 3.5% respective priors. If the job report print firmer data, the chances of witnessing further US dollar strength cant be eliminated.

Following that, another weeks monetary policy meeting of the Reserve Bank of Australia (RBA) will undoubtedly be important amid recent downbeat concerns for Canberra.

Also read:Nonfarm Payrolls Preview: Five reasons to anticipate a win-win release for the dollar

Technical analysis

AUD/USD pairs sustained trading below Mays low surrounding 0.6830-25 directs the bears towards the yearly low near 0.6680. However, the 0.6760 and the 0.6700 threshold may offer intermediate halts through the south run.

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