- AUD/USD regains momentum after upbeat macroeconomic data from Australia.
- Bets on smaller Fed rate hikes weigh on the dollar.
- Markets awaiting US inflation data on Thursday.
AUD/USD received fresh demand on Wednesday and went as high as 0.6925, just shy of Tuesday’s high. The pair then pulled back and is struggling to hold above the 0.6900 area, with an eye on the current month’s highs.
The pair was supported by encouraging data from Australia, which adds to the neutrality/weakness shown by the US dollar for these hours. The Australian Bureau of Statistics reported that the Consumer’s price index (CPI) accelerated again in November to 7.3% year-on-year, the highest rate in 32 years, from 6.9% the previous month. Another report showed that the retail sales in Australia they beat the most optimistic estimates and rose 1.4% in November to a record A$35.9 billion. In addition, the October reading was also revised up to show 0.4% growth, versus the 0.2% drop that had previously been reported. These data raise the odds of a further rate hike by the Reserve Bank of Australia in February and remain supportive of the intraday positive move.
The dollar, for its part, fails to take advantage of yesterday’s rebound from a seven-month low, amid increasingly firm expectations that the Federal Reserve it will soften your hard-line stance. Bets were boosted by data last week, which showed US wage growth in December and pointed to signs of easing inflationary pressures. In addition, business activity in the US services sector contracted, reaching the worst level since 2009 in December. This, in turn, reaffirmed expectations of a less aggressive tightening of policy by the Fed and maintains the yields of the US Treasuries near multi-week lows. Apart from this, a generally positive risk tone weakens the dollar.
However, it remains to be seen whether AUD/USD bulls can maintain their dominance or choose to ease their bets as investors eagerly await the release of US consumer inflation data on Thursday. These data will serve to shape the Fed’s monetary policy expectations.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
