Australian Dollar edges higher even as robust US services, firm Dollar cap gains
AUD/USD advances on Monday, trading around 0.6970 at the time of writing, up 0.34% on the day. The pair manages to gain ground despite persistent strength in the US Dollar (USD), which remains supported by elevated Treasury yields and weakness in the Euro (EUR).
The Australian Dollar edged higher on Monday, trading around 0.6970, up 0.34% for the day. This gain occurred despite the US Dollar's strength, which is bolstered by high Treasury yields and a weaker Euro. In the United States, services sector data showed resilience, with the ISM Services Purchasing Managers Index easing to 54.9 in September from 55.4 in August.
However, this figure was still above the 50 marker that separates expansion from contraction. Inflationary pressures are on the rise, with the Prices Paid Index increasing to 74.0 from 72.6. The Employment Index marginally improved to 50.1, while the New Orders Index declined to 59.8. The S&P Global Services PMI also showed a slight improvement, revising upward to 58.8 from 58.7.
The US Dollar Index (DXY) rose above 102.50, hitting its highest in 18 months, driven by the Euro's weakness, which makes up 57.6% of the index. US Treasury yields remain elevated, further supporting the Greenback. AUD/USD is currently at 0.6968, showing a slight bullish bias, trading above the 100-period simple moving average and near the 0.6955 support level.
Key resistance levels are at 0.6980 and 0.7005, while support is found at 0.6955 and the 100-period SMA at 0.6953.
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