AUD/USD drifts higher to 0.6680 amid USD weakening

AUD/USD gains ground around 0.6687 on the weaker USD.
The December PPI figure showed a cooler headline figure, while the core index was flat.
China’s Consumer Price Index (CPI) dropped 0.3% from a 0.5% fall seen in November, below the 0.4% decline expected.

Lallalit Srijandorn FXStreet

The AUD/USD pair kicks off the new week on a positive note during the early Asian session on Monday. The weaker-than-expected US Producer Price Index (PPI) data on Friday has dragged the US Dollar lower and has lifted AUD/USD. The market is likely to be quiet in terms of US economic data due to a long weekend for the US, with Martin Luther King Jr Day on Monday. The pair currently trades near 0.6687, gaining 0.06% on the day.

The US Bureau of Labor Statistics revealed on Friday that the headline PPI figure for December came in at 1.0% YoY versus 0.8% prior, and the Core PPI arrived at 1.8% YoY from 2.0% in November. Both readings were lower than the market consensus. On a monthly basis, the headline and Core PPI index remained flat at -0.1% and 0%, respectively. In response to the data, the Greenback and US Treasury bond yields edge lower.

According to the CME FedWatch Tool, the market has priced in an 86% odds of a rate cut by March, with the overall 2024 easing cycle priced at around 166 basis points (bps), compared to 75bps projected by the Fed dot plot.

On the other hand, China’s Consumer Price Index (CPI) dropped 0.3% from a 0.5% fall seen in November, below a 0.4% decline expected. Additionally, China's December exports exceeded estimates, but total trade for the world's second-biggest economy fell in 2023. Nonetheless, the impact of these figures was limited as market participants focused on the sign of cooling inflation in the United States.

Looking ahead, traders will monitor the Australian Westpac Consumer Confidence for January and TD Securities Inflation data, due on Tuesday. On the US docket, the NY Empire State Manufacturing Index will be due on Tuesday, and the December Retail Sales will be released on Wednesday. These figures could give a clear direction to the AUD/USD pair.

AUD/USD

Overview
Today last price	0.6686
Today Daily Change	0.0003
Today Daily Change %	0.04
Today daily open	0.6683

Trends
Daily SMA20	0.6755
Daily SMA50	0.6632
Daily SMA100	0.6513
Daily SMA200	0.6584

Levels
Previous Daily High	0.6729
Previous Daily Low	0.6678
Previous Weekly High	0.6735
Previous Weekly Low	0.6647
Previous Monthly High	0.6871
Previous Monthly Low	0.6526
Daily Fibonacci 38.2%	0.6697
Daily Fibonacci 61.8%	0.6709
Daily Pivot Point S1	0.6665
Daily Pivot Point S2	0.6646
Daily Pivot Point S3	0.6614
Daily Pivot Point R1	0.6715
Daily Pivot Point R2	0.6747
Daily Pivot Point R3	0.6766

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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