- AUD/USD is eyeing a stabilization above 0.6900 on stellar Caixin Services PMI data.
- Aussie bulls failed to capitalize on hawkish commentary by the RBA.
- The RBA elevated its OCR by 50 bps to 1.85%.
The AUD/USD pair has surpassed the immediate hurdle of 0.6900 swiftly and is likely to establish above the same as IHS Markit has reported stellar Caixin Services PMI numbers. The pair have witnessed a responsive buying action after printing a low of 0.6886 in the Asian session.
The Caixin Services PMI data has landed at 55.5, significantly higher than the expectations of 48 and the prior release of 54.5. It is worth noting that Australia is a leading trading partner to China and upbeat China economic data supports the aussie bulls.
On Tuesday, the asset witnessed a steep fall after the escalation of US-China tensions triggered negative market sentiment. The intention of visiting Taiwan by US House Speak Nancy Pelosi was followed by death threats from China. No doubt, the event is likely to result in sanctions on China.
Also, the antipodean failed to capitalize on the hawkish stance considered by the Reserve Bank of Australia (RBA) in its monetary policy meeting. RBA Governor Philip Lowe featured a third consecutive rate hike by 50 basis points (bps). An interest rate hike by 50 bps pushed the Official Cash Rate (OCR) to 1.85%.
The RBA has preferred not to take the bullet and elevate the interest rates to contain soaring price pressures in the Australian economy. Earlier, the Australian inflation rate landed at 6.1% for the second quarter of CY2022, much higher than the prior release of 5.1%.