AUD/USD bulls maintain control over 0.6800 ahead of RBA's Lowe and US NFP data

AUD/USD demonstrates the normal pre-data/event jitters as it oscillates near 0.6800 in the early Asian session on Friday, a day after reclaiming the 11-week high. In spite of this, the AUD/USD pair has risen for three consecutive days due to broad US Dollar weakness and market confidence regarding China's Covid circumstances. Weak US data could increase to the strength of the rally.

At press time, the US Dollar Index (DXY) was under pressure near 104.70, its lowest level in four months, as the dovish stance of Federal Reserve (Fed) members and gloomy remarks from US Treasury Secretary Janet Yellen boosted expectations of easy rate hikes.

Recently, Federal Reserve (Fed) Governor Michelle Bowman remarked that we should limit the rate of price increases. Prior to him, Fed Governor Jerome Powell and US Treasury Secretary Yellen both hinted at a rate hike slowdown and pushed for a soft landing. Michael Barr, vice chairman of supervision, added, "We may decrease the rate of rate hikes at the next meeting." Notably, the recent comments by John Williams of the New York Fed appeared to test the US Dollar bears as policymakers emphasized that the Fed still has a ways to go with rate hikes.

In addition to Fed-speak, the majority of negative US data also weighed heavily on the US Dollar. However, the US Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation indicator, matched market expectations of 5.0% on a year-over-year basis, but slowed to 0.2% on a month-over-month basis, vs 0.3% projected. In addition, the US ISM Manufacturing PMI for November decreased to 49.0 from 49.7 anticipated and 50.2 previously.

In addition, the three consecutive days of a decline in the number of daily Covid infections in China from the record high allowed regulators to hint at the "next step" in fighting the virus while announcing several relaxations of activity-control measures. Given the strong relations between Australia and China, AUD/USD purchasers frequently applaud positive developments for Beijing.

Domestically, Australia's Private Capital Expenditure for the third quarter (Q3) decreased to -0.6%, compared to 1.5% projected and -0.3% previously. In addition, negative November readings for Australia's AiG Performance of Mfg Index and S&P Global Manufacturing PMI appeared to have pressured AUD/USD bulls at the multi-day high.

Prior to the speech of Reserve Bank of Australia (RBA) Governor Philip Lowe, it should be noted that the mixed performance of Wall Street and the multi-month low US Treasury yields appeared to have weighed on AUD/USD bulls. During his speech earlier in the week, the policymaker hinted about easing interest rates, thus the bull's anxieties are reasonable. In addition, the cautious outlook ahead of the crucial US jobs report for November, for which preliminary indications have been negative and may favor Australian buyers if they match projections, could weigh on prices.