- AUD/USD posts gains on Friday after US Producer Price Index (PPI) data showed moderation in inflation.
- The US core PPI rose 0.2% MoM as expected, while the annual PPI fell to 1.8%, increasing the likelihood of a Fed rate cut.
- Swaps markets show a 95.6% probability of a 25bp Fed rate cut in November, up from 83.3% previously.
The Australian dollar regained some ground against the US dollar on Friday after a measure of prices paid by producers reaffirmed that inflation is declining, justifying further easing by the Federal Reserve. AUD/USD is trading at 0.6748, posting modest gains of over 0.12%, although it is set to post weekly losses of over 0.60%.
AUD/USD rises as US PPI data reinforces expectations of 25bp Fed rate cut in November
Data from the US Bureau of Labor Statistics (BLS) showed that the Producer Price Index (PPI) for September was unchanged at 0%, down from August’s 0.2% month-on-month increase. Excluding volatile items, the so-called core PPI expanded 0.2% mom as expected, down from 0.3% in the previous month.
On an annual basis, the PPI rose 1.8%, down from 1.9%, while underlying prices rose 2.8%, up from 2.6%, and fell short of 2.7%. Today’s data and yesterday’s CPI report suggest the Fed could cut rates at the November meeting.
Swaps markets show the odds of a 25bp rate cut by the Fed at 95.6%, substantially up from 83.3% yesterday, when traders reduced their positions following the line statements. hardline from Raphael Bostic of the Atlanta Fed, who said he is open to cutting or maintaining rates at the next two meetings.
In other data, the University of Michigan (UoM) revealed that Consumer Sentiment deteriorated slightly from 70.1 to 68.9 and fell short of consensus. Americans turned pessimistic due to higher living costs, while they revised inflation expectations upward from 2.7% to 2.9% in a year.
Chicago Fed President Austan Goolsbee crossed the lines on Bloomberg, praising progress on inflation and the labor market. He added that despite September’s strong jobs report, there are no signs of overheating.
Next week, the Australian economic agenda will be light. Reserve Bank of Australia (RBA) Deputy Governor Sarah Hunter will cross the lines on 15 October, followed by the release of employment data on 16 October.
On the US front, the calendar will feature speakers from the Fed, Trade Balance, Retail Sales, Initial Jobless Claims, Industrial Production and housing data.
AUD/USD Price Forecast: Technical Outlook
From a technical point of view, AUD/USD is consolidating but with a slightly bullish bias. For buyers to resume the uptrend, they need to break above the October 9 high at 0.6761, which would allow them to challenge the weekly peak at 0.6809.
On the contrary, if the sellers intervene and push the exchange rate below the 50-day moving average (DMA) at 0.6733, it could open the door for a fall towards the 100-day moving average (DMA) at 0.6691.
Australian Dollar PRICE Today
The table below shows the percentage change of the Australian Dollar (AUD) against major currencies today. Australian dollar was the strongest currency against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | -0.07% | 0.39% | 0.17% | -0.20% | -0.28% | 0.12% | |
| EUR | 0.05% | -0.05% | 0.38% | 0.17% | -0.16% | -0.28% | 0.10% | |
| GBP | 0.07% | 0.05% | 0.45% | 0.24% | -0.10% | -0.21% | 0.19% | |
| JPY | -0.39% | -0.38% | -0.45% | -0.24% | -0.56% | -0.67% | -0.36% | |
| CAD | -0.17% | -0.17% | -0.24% | 0.24% | -0.34% | -0.43% | -0.03% | |
| AUD | 0.20% | 0.16% | 0.10% | 0.56% | 0.34% | -0.13% | 0.27% | |
| NZD | 0.28% | 0.28% | 0.21% | 0.67% | 0.43% | 0.13% | 0.41% | |
| CHF | -0.12% | -0.10% | -0.19% | 0.36% | 0.03% | -0.27% | -0.41% |
The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change shown in the box will represent the AUD (base)/USD (quote).
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.
