The Australian dollar cuts recent gains while the US dollar recovers before PMI data

• The Australian dollar has gains while the US dollar weakens on Thursday.
• The manufacturing PMI in Australia remains stable at 51.7 in May, in the meantime, the PMI services increased to 50.5.
• FED officials noted that a drop in consumer and businesses’ confidence is attributed to changes in American trade policy.

The Australian dollar (AUD) remains slightly higher compared to the US dollar (USD) after reducing daily gains on Thursday. The AUD / USD pair maintains its position after the publication of preliminary data of the S&P Global Index purchase managers (PMI).

The Australia index of manufacturing purchasing managers arrived at 51.7 in May against 51.7 before. Meanwhile, the PMI services decrease to 50.5 in May from the previous reading of 51.0, while the composite PMI clings to 50.6 in May against 51.0.

The Reserve Bank of Australia (RBA) reduced its Official Cash rate (OCR) to 25 base points on Tuesday. In addition, Governor RBA Michele Bullock supported the decrease in central bank rates. Bullock noted that the reduction in inflation is significant and expressed that a drop in rate was a proactive and stimulating decision which was appropriate given the state of the economy. She also mentioned that the board of directors was ready to take additional measures if necessary, which increases the prospect of future changes.

The Australian dollar cuts daily earnings while the US dollar recovers the land

• The US dollar index (DXY), which follows the US dollar (USD) against a basket of six large currencies, appreciates after having stopped its three -day sequence. At the time of writing the editorial staff, the Dxy holds its position around 99.70, slightly above two weeks.
• S&P Global US S&P data purchase managers’ index (PMI) should be published later in the North American session. The overall commercial activity should develop at a regular rate in May, which could provide support for the greenback.
• The Chamber’s Rules Committee approved the US President’s Tax Tax Bill Donald Trump. The United States House Rules Committee said that a full voting chamber on the Trump tax reduction bill should take place in a few hours. The bill was supported by the 8-4 committee against a long session of 10 p.m. Wednesday. The Republican leaders expressed two votes to start the debate and adopt the bill before Sunrise on Thursday, according to Reuters.
• Cleveland president Fed, Beth Hammack, and the president of San Francisco, Mary C. Daly, both expressed increasing concerns concerning the American economy during a panel event organized by the Federal Reserve Bank of Atlanta. Although the important economic indicators are still strong, the two officials noted a drop in the confidence of consumers and businesses and partially accused the change of opinion on American trade policies.
• On Tuesday, the president of the Atlanta fed President Raphael Bostic extended the remarks he made the day before. Bostic warned that the inconsistent and changing tariff policies introduced during the Trump administration may disrupt American commercial logistics, which greatly depend on large -scale imports to meet domestic demand.
• The US dollar had trouble after Moody downgraded the US credit note from AAA to AA1. This decision is aligned with similar fitch ratings downshifts in 2023 and Standard & Poor’s in 2011. Moody’s now projects the American federal debt to climb to around 134% of GDP by 2035, against 98% in 2023, the budget deficit should widen almost 9% of GDP. This deterioration is awarded to the increase in debt service costs, the widening of rights programs and the drop in tax revenue.
• The economic data published last week highlighted the relaxation of inflation, as the Consumer Price Index (IPC) and the Prix Producers (PPI) index reported a deceleration in price pressure. This has increased expectations that the federal reserve can implement additional rate drops in 2025, contributing to new American dollar. In addition, disappointing American retail figures have deepened concerns during a long period of slow economic growth.
• On Wednesday, the Chinese Ministry of Commerce said that American measures on Chinese advanced chips are “typical of unilateral intimidation and protectionism”. Chinese authorities are trying to find out if the United States is seriously to correct its erroneous practices.
• The PBOC announced on Tuesday a reduction in its loan bonus rates (LPR). The one -year LPR was reduced by 3.10% to 3.00%, while the LPR at five was reduced by 3.60% to 3.50%.
• The Australian dollar sensitive to the risk has obtained support for renewed optimism surrounding an American commercial truce of 90 days and hopes for new trade agreements with other countries. Meanwhile, the Secretary in the United States of the Treasury, Scott Bessent, told CNN on Sunday that President Donald Trump intends to implement rates at levels previously threatened on business partners who do not engage in “good-faith” negotiations.
• AUD has also been affected by Australia’s political disorders. Following the withdrawal of the National Party of his collaboration with the Liberal Party, the coalition of the opposition dissolved. The Labor Party in power, on the other hand, took advantage of the troubles and resumed power with a more robust and expansive program.

The Australian dollar remains in a tight fork

The Aud / USD pair Exchange about 0.6440 Thursday. The daily technical indicators reflect a bullish tone because the pair maintains its position above the exponential mobile average of nine days (EMA), while the relative force index of 14 days (RSI) remains above the neutral level 50, both supporting a persistent ascending momentum.

Immediate resistance appears at a summit of six months of 0.6515, recorded on December 2, 2024. A decisive break above this barrier could open the way to a test from the seven-month summit to 0.6687, which was reached in November 2024.

Learning, the EMA of nine days of 0.6427 acts as immediate support, followed by the EMA of 50 days almost 0.6367. A greater depreciation would undermine the upward and medium -term upward perspectives, possibly opening the path to the lowest in March 2020 of 0.5914.

AUD / USD: Daily graphic