Title: AUD/USD drops below 0.6500 as DXY defends 112.00, RBA policy hogs limelight
September 30, 2022 12:33 AM ET
The AUD/USD pair slipped below the psychological support of 0.6500 after failing to test Thursday's high at 0.6525. The asset's decline is gradual as the upward trend is intact amid general weakness in the US Dollar Index (DXY). In Asian trading, the DXY attempted to defend the 112.00 level, which led to a minor correction in the antipodean currency.
As investors await the announcement of the Reserve Bank of Australia's (RBA) monetary policy decision for October, the security is expected to perform lacklusterly. The RBA's monetary policy minutes released on September 20 showed that policymakers were also considering a 25 basis point rate hike, despite announcing a fourth consecutive 50 basis point hike. RBA Governor Philip Lowe expects the policy rate to remain around 3.85%.
Meanwhile, the poor Caixin manufacturing PMI data did not affect Aussie bulls. The economic data landed at 48.1, below expectations and the previous release of 49.5.
As Australia is China's top trading partner, the weaker-than-expected Caixin PMI manufacturing data has a significant impact on Australian exports.
As for the US dollar index (DXY), it has managed to defend the 112.00 level for now. The clouds of pessimism over the US dollar index (DXY) have not cleared yet, and the pullback movement may be completed, which would resume the downward movement.
In today's session, investors will focus on the core Personal Consumption Expenditure (PCE) data, which is expected to come in at 4.7%, 10 basis points higher than the previous release