AUD/USD drops despite soft US PMI figures fueling Fed rate cuts; eyes on Aussie’s GDP and Powell testimony

Wall Street sets a downbeat tone as big tech equities fall. Softer than expected, Purchasing Managers Indices revealed by S&P Global and the ISM witnessed a tick up in the AUD/USD pair, as traders increased bets the US Federal Reserve will ease policy as soon as June. S&P Global Services PMI came at 52.3 in February, down from 52.5, while the Composite Index stood at 52.5, above estimates of 51.4. Nevertheless, the ISM Services PMI, the most widely sought by investors, rose 52.6, below estimates of 53, and trailed January’s 53.4.

In the meantime. AUD/USD traders are eyeing the release of Australia’s Gross Domestic Product (GDP) preview for the last quarter of 2023. Forecasts suggest the economy grew 0.3% QoQ unchanged, and annually based decreased from 2.1% to 1.4%.

Aside from that, the next major event would be the testimony of the Federal Reserve Chairman Jerome Powell at Capitol Hill against the Senate Banking Committee. Most analysts estimate Powell to remain slightly hawkish and would emphasize that patience is required. He would state that the jobs market remains strong and that inflation continues to trend lower.