Title : AUD/USD defends the 0.6480 support as focus shifts to US ISM Services PMI
Oct 5, 2022 1:41 AM ET
The AUD/USD has seen buying interest around 0.6480 as the pullback move in the US dollar index (DXY) appears to be ending. Traction is returning to the risk-on market profile as yields have moved lower from the day's high. Yields on the 10-year US Treasury have declined sharply after posting the day's high at 3.64% and are down to 3.62% as of this writing.
It could be concluded that the DXY is feeling pressure ahead of the release of the US services PMI data. According to consensus, the US services PMI will drop to 56.0 versus the previous release of 56.9. It seems that the continuation of the Federal Reserve's (Fed) tightening policy has started to show its consequences. Retail demand is slowing, and the services sector will be affected by this.
In addition, the US services sector new orders index data has been significantly downgraded to 58.9 from the previous release of 61.8. A decline in the forward-looking indicator is expected to bring pure volatility to the DXY.
Aside from the services PMI data, US ADP employment change data will remain in focus. The consensus economic data indicates that the US economy added 200,000 jobs to the labor market in September, up from the previous reading of 132,000.
Meanwhile, the return of optimism in the markets is supporting the Australian dollar. Earlier in Asia, IHS Markit released S&P PMI data. The composite PMI was released at 50.9 versus the previous figure of 50.8, while the services PMI rose to 50.6 versus expectations of 50.4.