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Australian Dollar steadies on risk aversion, focus on Aussie PMIs

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  • AUD/USD slips as geopolitical tensions weigh on risk sentiment.
  • US private hiring data improves, while Richmond Fed President Barkin warns that inflation remains a concern despite recent rate cuts.
  • Traders focus on upcoming Australian PMI data with the RBA focused on high inflation.

The Australian Dollar (AUD) registers minimal losses against the Greenback late during Wednesday’s North American session after hitting a daily high of 0.6915. Risk aversion boosted the prospects of safe-haven currencies, due to the likelihood of Israel retaliating after Iran’s missile attack on Tuesday. The AUD/USD trades at 0.6882, virtually unchanged.

Antipodeans remained pressured due to geopolitical tensions. Hence, the Greenback was boosted as Israel’s envoy to the United Nations warned of a possible attack. At the same time, a senior official at the US State Department revealed that the US is also weighing the answer to Iran’s attack.

US data was positive, with private hiring improving in September. Richmond Fed President Thomas Barkin reiterated that despite lowering rates “aggressively” by 50 basis points (bps) in September, they had not won the battle against inflation.

On the Australian Dollar front, traders are eyeing the release of September’s Judo Bank Services and Composite PMIs, with the former expected to cool down sharply though still in expansionary territory. The Reserve Bank of Australia (RBA) has remained wary that inflation is too high, failing to provide hints of the beginning of its easing cycle.

Earlier, the Australian Bureau of Statistics (ABS) revealed that Retail Sales on Tuesday were better than expected, justifying the RBA’s stance to hold rates higher.


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