AUDUSD pair regains its recent losses.
After recovering from the year-to-date (YTD) lows at 0.6270 during Friday’s early Asian session. The AUDUSD pair is now trading over 0.6300. The US Dollar’s (USD) fall and the potential for additional rate hikes by the Reserve Bank of Australia (RBA). At its meeting in November support the pair’s modest rebound. At present, the pair is trading at about 0.6325, up 0.06% for the day.
Preliminary Q3 GDP data for the US increased by 4.9%, and continuing claims reached their highest level since May.
Better above the market’s forecast of 4.2%. The preliminary US Gross Domestic Product (GDP) Annualized for the third quarter (Q3) increased by 4.9%. From the previous estimate of 2.1% expansion. Furthermore, the weekly Initial Jobless Claims for the week ending October 21 were lower. Than the market consensus of 208,000, coming in at 210,000 from 200,000 (revised from 198,000) in the prior reading. Continuing claims increased by 63,000 to reach their highest reading since May.
The data causes The Greenback to first gain traction before reversing course when US Treasury yields declined. US Treasury Secretary Janet Yellen stated on Thursday that although Americans are not experiencing a recession, the US economy is concerned about the state of the economy. Yellen added that the current increase in yields has nothing to do with deficits and does not signal the impending start of a recession. Rather, it illustrates how robust the US economy is.
The markets are pricing in another rate hike from the RBA at its meeting in November.
Regarding Australia, Governor of the Reserve Bank of Australia (RBA) Michele Bullock stated on Thursday that while the CPI was somewhat higher than anticipated, it was roughly where we anticipated it would be. The central bank’s goal, according to Bullock, is to decelerate the economy without sending it into a recession. Since the most recent Australian inflation data were expected by policymakers, the markets are bracing for a possible further rate hike from the RBA on November 7.
The Australian Producer Price Index (PPI) will be watched by market players later on Friday. The US core Personal Consumption Expenditures Price Index (PCE) for the month of May will also be made public. These numbers can provide the AUD/USD pair with a clear direction.
