AUD/USD struggles to gain traction, flat-lined near monthly low ahead of US PCE inflation data By HareshMenghani AUDUSD Recession Fed Inflation Currencies
Recession fears weighed on investors’ sentiment and undermined the perceived riskier aussie.Investors now look forward to the US Core PCE Inflation for May for a fresh directional impetus.struggled to capitalize on its modest intraday bounce from the vicinity of the monthly low and remained below the 0.6900 mark heading into the North American session.
Concerns that a more aggressive move by major central banks would pose challenges to global economic growth continued weighing on investor' sentiment. This was evident from a generally weaker tone around the equity markets, which provided a fresh lift to the safe-havenIn fact, the USD shot closer to a two-decade high and was also underpinned byChair Jerome Powell's overnight hawkish remarks, reaffirming a faster policy tightening path.
Hence, the market focus will remain glued to the release of the Fed's preferred inflation gauge, the Core PCE Price Index. The data would influence the USD price dynamics and provide a fresh impetus to the AUD/USD pair. In the meantime, the USD bulls seemed rather unaffected by the ongoing decline in the US Treasury bond yields.
The fundamental backdrop supports prospects for an extension of the recent depreciating move for the AUD/USD pair, though bearish traders might wait for sustained weakness below the 0.6850 area. Spot prices might then aim to challenge the YTD low, around the 0.6830-0.6825 region touched in May, before eventually dropping to the 0.6800 mark.
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