- Aussie gains 0.33%, consolidating around 0.6200.
- Markets are analyzing US PCE data for political cues.
- You can expect the Fed to keep interest rates on hold through early 2025.
The Australian dollar consolidates around the 0.6200 level on Friday as investors analyze November’s US personal consumption expenditure (PCE) inflation data. With the Federal Reserve (Fed) expected to keep interest rates steady at its first monetary policy meeting in 2025, investors are also waiting for next week’s minutes from the Reserve Bank of Australia (RBA) to gain insight into potential interest rate changes.
Weak US PCE data is moderating dollar strength, offering modest support for the Australian currency’s nascent rebound.
Daily market recap: Aussie sees soft rebound as markets digest tender PCE data
- The U.S. dollar index fell after hitting a two-year high of 108.50 after PCE data undercut inflation expectations.
- The headline monthly U.S. PCE reading for November was 0.1%, up from 0.2%.
- The annual measure increased by 2.4% y/y, slightly below the forecast of 2.5%.
- Core PCE fell to 0.1% monthly from 0.3%, steady at 2.8% for the year, below estimates of 2.9%.
- The RBA’s minutes, due on Tuesday, could shed lithe on future policy moves after Governor Michele Bullock expressed confidence in easing wage and demand pressures.
- A sluggish growth outlook in China and potential US tariffs continue to weigh on growth in Australia, although today’s softer US data provides some short-lived relief.
AUD/USD Technical Outlook: Aussie Finds Support as Oversold Signals Wane
The AUD/USD rate continues to rise for the second day in a row. The relative strength index (RSI) is near 33, bouncing from the oversold area, while the moving average divergence (MACD) histogram shows flat red bars.
While the currency pair’s momentum remains frail, the pair’s moderate recovery and improving technical signals suggest it may stabilize further if incoming data continues to weaken the US dollar’s strength.
