The AUD/USD pair is showing strength as the US Dollar weakens due to easing price pressures. Soft US inflation data for June has increased the likelihood of a Fed rate cut. The Australian Dollar’s performance will depend on the outcome of China’s third plenum meeting.
The AUD/USD pair has risen after a slight correction, aiming to break through the resistance level of 0.6800. This is happening as speculation grows that the Fed will lower interest rates starting from the September meeting.
The US Consumer Price Index for June showed a decrease in inflation, prompting expectations for rate cuts. The CME FedWatch tool predicts a rate cut in September, with the possibility of another cut later in the year.
The US Dollar Index has dropped as the prospect of early rate cuts weighs on the currency. Market sentiment remains positive for risk-sensitive assets, with S&P 500 futures posting gains.
Investors are also keeping an eye on China’s third plenum meeting next week, where measures to boost the real estate and manufacturing sectors are expected. Strong fiscal spending announcements could strengthen the Australian Dollar, while lower-than-expected spending could have the opposite effect.
Overall, the AUD/USD pair is being influenced by a combination of US economic data and developments in China. The outcome of these factors will determine the currency pair’s movement in the near future.