- The aussie bounces up from six-month lows at 0.6170 and returns to 0.6300.
- The US dollar losses ground as the effect of US CPI data ebbs.
- AUD/USD might depreciate below 0.6000 – ING.
The Australian dollar is going through a sharp recovery during Thursday’s US session erasing loses from earlier on the day. The pair has bounced from six-month lows at 0,6170, returning to levels right below 0.6300 and turning positive on the day.
The US dollar retreats from highs
The Aussie pares losses with the US dollar losing ground as the effect of the US inflation report start to settle. Investors might be coming to terms with the idea that a 100 BP rate hike in November is rather unlikely, especially after the moderately dovish tone of September’s FOMC minutes.
According to the US CPI data, prices accelerated at a 0.4% pace in September, well beyond expectations of a 0.2% increase, with the year inflation surging 8.2% higher. These figures triggered hopes that the Federal Reserve could increase borrowing costs at a more aggressive pace in November.
Federal Fund Futures have priced in a 13% chance of a 100 basis points rate hike immediately after the data release and the US dollar surged across the board. The US Dollar Index (DXY) appreciated to a fresh 20-year high at 114.70 to pull down to the 112.00 area at the moment of writing.
AUD/USD might extend losses below 0.6000 – ING
On a longer-term perspective, currency analysts at ING, observe see the Aussie likely to extend its decline to levels below 0.6000: “We remain bearish on AUD/USD into year-end, as risk sentiment fragility, China’s economic (and currency) woes and a strong USD (…). A break below 0.60 this year is entirely possible.”
Technical levels to watch
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 stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.