The Australian dollar (AUD) continued its upward momentum against the US dollar (USD) for the third straight session on Friday (1/24). The AUD/USD pair gained traction after the People's Bank of China (PBOC) conducted a medium-term lending operation.

The Chinese central bank kept interest rates at 2.00% and injected 200 billion yuan ($27.46 billion) through a one-year medium-term lending facility (MLF) to certain financial institutions, according to Reuters.

Traders are likely to keep an eye on the release of the preliminary US S&P Global Purchasing Managers' Index (PMI) and the Michigan Consumer Sentiment Index for January.

Australia's Judo Bank Composite Purchasing Managers' Index (PMI) edged up to 50.3 in January, up from 50.2 in December. This marked the fourth straight month of modest private sector expansion, driven by growth in the services sector while manufacturing output held steady.

The Judo Bank Manufacturing PMI rose to 49.8 in January from 47.8 in December, the highest reading in 12 months, snapping a 13-month contraction streak. However, the Services PMI fell to 50.4 from 50.8, hitting a six-month low and indicating a slowdown in growth in the sector.

On Thursday, Chinese authorities introduced several measures to stabilize its stock market, including allowing pension funds to increase investment in domestic equities. A pilot scheme allowing insurance companies to buy equities will be launched in the first half of 2025, with an initial scale of at least 100 billion yuan. Meanwhile, the People's Bank of China (PBOC) said it "will expand the scope and increase the scale of liquidity tools to fund equity purchases at an appropriate time." (AL)

Source: FXstreet