AUD/USD finds an intermediate support near 0.6500

The AUD/USD pair finds bids near the crucial support of 0.6500 in Thursday’s early New York session. The Aussie asset rebounds as the US Dollar Index (DXY) has surrendered its entire gains generated in the European session. The S&P500 is expected to open positively, considering the strength in the overnight futures. The USD Index has fallen sharply after facing stiff resistance near 103.80. Even though the Federal Reserve (Fed) has pushed back expectations of rate cuts in March, it is imminent that the central bank will reduce borrowing rates this year as price pressures are consistently easing.

Forward action in the USD Index will be guided by the United States Institute of Supply Management’s (ISM) Manufacturing PMI for January, which will be published at 15:00 GMT. Investors have forecasted that factory PMI drop to 47.0 from 47.4 in December. This would be the 14th straight month when the Manufacturing PMI would remain below the 50.0 threshold.

Action in the FX domain will continue as the January US Nonfarm Payrolls (NFP) report will be released on Friday. Significant increases in payroll numbers and higher wage growth would indicate a stubborn outlook for the underlying inflation. Meanwhile, the Australian Dollar has faced selling pressure despite upbeat Caixin Manufacturing PMI data. The economic data landed at 50.8%, outperforming the expectations of 50.6% despite higher furloughs due to the festive mood. Being a proxy to China’s economic growth, the appeal for the Australian Dollar generally improves if economic prospects in the world’s second-largest nation outperform.