- AUD/USD remains sidelined after closely missing the bearish weekly close.
- US Dollar gained on upbeat data, pre-Fed anxiety and geopolitical fears.
- Aussie Dollar cheers optimism surrounding China, RBA’s positive tone.
- No major data from Australia on cards for publishing today but rest of the week will be too volatile.
AUD/USD began the key week on a dicey floor after closely missing the negative weekly print. In doing so, the Aussie pair portrays the typical pre-data anxiety ahead of the key monetary policy meeting of the US Federal Reserve, a speech from the Reserve Bank of Australia (RBA) Governor Philip Lowe and the US inflation numbers, not to forget Aussie jobs report for November. Given the slew of important catalysts lined up for publication, the Aussie pair struggles for clear directions and remains volatile.
That said, the US Dollar Index (DXY) printed the first weekly close on the positive side in the last three as the latest US economy came in better than expected.
The US Producer Price Index (PPI) matched the market forecasts of 7.4% YoY for November versus 8.1% prior. Further, the Core PPI rose to 6.2% YoY versus 6.0% expected and 6.7% previous readings. Additionally, preliminary readings of the University of Michigan’s (UoM) Consumer Sentiment Index rose to 59.1 for December versus 53.3 market forecasts and 56.8 final readings for November. Moreover, the 1-year inflation expectations dropped to 4.6%, the lowest since September 2021 while compared to 4.9% expected whereas 5-10 year expectations were stable at 3.0%.
Elsewhere, China continues to praise a reduction in the daily Covid cases and shows readiness for more stimulus. During the weekend, Nikkei Asia reported that China banks throw a $460 billion credit lifeline to the real estate sector.
At home, the RBA’s push for slower rate hikes failed to gain major acceptance as the policymakers showed readiness for stronger moves if needed. The same joins mixed data to restrict the AUD/USD moves.
Amid these plays, Wall Street closed in the red and yields improved, which in turn restricted the AUD/USD pair’s safe-haven demand and weighed on the prices ahead of the key week.
Moving on, a light calendar on Monday and a cautious mood ahead of the key data/events could restrict intraday moves of the AUD/USD pair. However, hopes of a hawkish hike by the Fed versus the RBA’s latest defense to the easy rate hike teases the pair sellers.
Technical analysis
A one-month-old bullish channel restricts short-term AUD/USD moves between 0.6870 and 0.6685 as the Aussie traders struggle to cross the 200-day EMA hurdle surrounding 0.6835.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rises toward 1.0850 as USD struggles to recover
EUR/USD has regained its traction and rose to the 1.0850 area after having retreated toward 1.0800 earlier in the session. The US Dollar struggles to stage a decisive rebound despite upbeat consumer confidence data from the US, allowing the pair to continue to push higher.
GBP/USD advances to fresh daily hgihs near 1.2350
Following a correction to the 1.2300 area, GBP/USD reversed its direction and advanced toward 1.2350. Although Wall Street's main indexes are trading mixed on Tuesday, the US Dollar stays on the back foot and helps the pair gather bullish momentum.
Gold pulls away from session highs, holds near $1,960
After having climbed toward $1,970 earlier in the day, Gold price erased a portion of its daily gains and retreated to the $1,960 area. The benchmark 10-year US Treasury bond yield stays in positive territory above 3.5%, not allowing XAU/USD to gather further bullish momentum.
Ethereum (ETH) options traders turn bearish ahead of the token unlock
Ethereum is holding steady above the $1,700 level despite slight bearish sentiment among options traders. Analysts have noted a rise in open interest in Ethereum, as co-founder Lubin assures that the altcoin is not a security.
S&P 500: With banking crisis in rear view, market pushes index closer to 4,000
The S&P 500 on Monday moved ahead cautiously without much fanfare after the US government agreed to sell $72 billion worth of Silicon Valley Bank assets to First Citizens Bank (FCNCA).