The Australian Dollar (AUD) showed stability against the US Dollar (USD) after a 0.33% gain on Thursday, driven by US GDP and increasing inflation. The market is now anticipating the first rate cut by the Federal Reserve to take place in November rather than September, based on the latest economic data. Investors are closely watching for upcoming Australia Producer Price Index (PPI) and US Core Personal Consumption Expenditure (PCE) figures for further market direction.
The AUD/USD pair opened Friday’s Asian session at 0.6518, nearly unchanged after trading at 0.6525 following the US report showing lower-than-expected economic growth and higher inflation. Despite Wall Street ending with losses, the US Dollar faced pressure due to the soft GDP report and unexpected rise in Core PCE, leading investors to rethink rate cuts by the Fed.
Market expectations for the first 25 basis point rate cut have shifted from September to November. Additionally, positive US labor market data showed 207,000 Americans filing for unemployment claims, below estimates. As the trading day progresses, AUD/USD traders are monitoring the release of Australia’s PPI and US Core PCE figures during the North American session.
Technically, the AUD/USD remains bearishly biased below the 50 and 200-day moving averages at 0.6525. A break above this level could push the pair towards 0.6585 and 0.6600, while a downside movement may lead to a breach below 0.6500 and further losses towards 0.6442 and 0.6362.
In summary, the AUD/USD pair continues to reflect market reactions to US economic data, with upcoming releases expected to provide further direction for traders in the forex market.