Following the Fed's Decision, AUD/USD Rises Ahead of Australian Employment Data

On Wednesday, the Australian Dollar strengthened against the US Dollar by 0.83%, as the Federal Reserve maintained their monetary policy outlook from the previous year, which called for 75 basis points (bps) of rate cuts in 2024, while holding rates constant. The pair opens the Asian trading session at 0.6595, an increase of 0.14%.

Wall Street concluded the trading session with an upward trend subsequent to the Federal Reserve's determination. The Federal Reserve maintained the Federal Funds rate (FFR) between 5.25 and 5.50 percent and declared the economy and labor market to be robust. Although the disinflation process had progressed, the Fed's stance of patience was validated by the final two readings of the CPI and PPI. Fed officials adhere to their three rate decreases scheduled for 2024 despite this.

In reaction to the data, the yield on 10-year US Treasury notes decreased by 0.5 basis points to 4.277%, while the US dollar was battered. The US Dollar Index (DXY), which measures the value of the US dollar relative to other currencies, falls 0.42 percent to 103.38, aiming below the 200-day moving average (DMA), a significant dynamic support level that indicates whether an asset is bullish or bearish in the financial markets.

The Australian schedule included the publication of the March Judo Bank Flash PMI figures. In contrast, the services PMI increased from 53.1 to 53.5, whereas the manufacturing PMI declined from 47.8 to 46.8. The Composite Index increased from 52.1 to 52.4.

AUD/USD exchange Traders are awaiting additional data from Australia, where an anticipated 40,000 individuals will be added to the labor force. The unemployment rate would be reduced from 4.1% to 4% as a result. A favorable analysis may indicate that the Reserve Bank of Australia (RBA) ought to maintain its present position and disregard conjectures regarding the initial rate reduction scheduled for August.