AUD/USD rises above 0.6500, eyeing weekly gains amid soft US data

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• AUD/USD experienced a notable uptick, gaining 0.67% in the New York session and heading towards a weekly increase of over 2.30%.
• Despite Federal Reserve officials resisting the idea of rate cuts in 2024, market futures are pricing in a potential easing of 100 basis points by December next year.
• Upcoming week will see key data releases from the US, including Existing Home Sales, FOMC minutes, and PMIs.
• Australia’s calendar will feature speeches from RBA Governor Michele Bullock and the latest RBA meeting minutes.

The AUD/USD prints gains of 0.66% in late trading during the New York session, set to print weekly gains of more than 2.30%, and trades back above the 0.6500 figure, posting daily gains of 0.67%.

Aussie Dollar underpinned by soft US economic data, speculations grow Fed reached peak rates

During the week, the AUD/USD traveled from around weekly lows of 0.6350s, but softer than expected inflation data from the United States (US), sponsored a leg-up on Tuesday of more than 2%. US CPI rose by 3.2% YoY, less than expected, followed by Wednesday’s PPI drop of -0.5% MoM.

Additional data is painting a soft-landing environment in the US, after Retail Sales disappointed investors, and came at -0.1%, better than the -0.3% contraction, but below September’s 0.9% advance. That, along with weaker jobs data, witnessed unemployment claims hitting a three-month high on Thursday, reassured investors the US Federal Reserve (Fed) had finished its tightening cycle.

However, most Fed officials pushed back against rate cut estimates for 2024, but interest rate futures see traders pricing 100 bps of easing toward December of the next year.

On the Australia front, Business conditions improved though leading indicators dipped. Although the Wage Price Index rose as expected by 1.3%, data suggest the creation of just 17K full employments suggests the labor market is not as strong as expected.

In the next week, the US economic docket will feature Existing Home Sales, FOMC last meeting minutes, Durable Goods Orders, Initial Jobless Claims, and PMIs. On the Australia front, the Reserve Bank of Australia (RBA) Governor Michele Bullock would cross wires on Tuesday and Wednesday, along with the release of the latest meeting minutes, which could shed some light on the Aussie economy.

AUD/USD Technical Levels