August 24, 2022 01:35 AM ET
The AUD/USD pair saw a firmer rebound after correcting near the critical 0.6900 support at the start of the European session. The asset is advancing confidently and is expected to recover its three-day high above 0.6960 as the U.S. Dollar Index (DXY) trimmed gains after facing barricades around 108.80.
The DXY is expected to remain volatile as investors await the release of U.S. durable goods orders.
According to preliminary estimates, the economic data may fall by 0.6%, compared to the previous release of 2%. The dismal U.S. Purchasing Managers' Index (PMI) data released Tuesday confirms the poor forecast for durable goods orders.
The investment community is aware that the Federal Reserve's (Fed) first priority is to bring price stability to the economy. To accomplish this, the Fed has already raised interest rates from 2.25 percent to 2.50 percent at its last four policy meetings, but investors believe the Fed has lagged in the face of rising inflation. And the U.S. private sector has become a victim of the Fed's leniency. The Fed is sticking to its pace of interest rate hikes, and market participants are unlikely to revise their growth forecasts upward for some time.
On the antipodean front, Australian bulls are posting a decent performance despite the pessimistic Australian PMI numbers. The S&P Global Manufacturing PMI fell sharply to 54.5, below expectations of 57.3 and the previous release of 55.7. While the services PMI data came in at 49.6, it was below expectations of 54 and the previous figure of 50.9.