AUDUSD wobbles near a seven-month high, losing bullish momentum.

The Aussie(AUDUSD) pair remained volatile around 0.7120-15 as bulls attempt to protect a five-day winning run around the highest levels since June 2022 early Friday.

Australia’s Q4 Export-Import Price Index had mixed results, with PPI probing Aussie(AUDUSD) pair buyers.

The Reserve Bank of Australia (RBA), which is primarily supported by solid Consumer Price Index (CPI) data, fades amid market volatility. The lately higher US Treasury bond rates are also likely to test the AUDUSD bulls, owing to the US Q4 GDP’s annualized growth rate of 2.9%, versus 2.6% forecast and 3.2% before. It should be noted, however, that the discussions around the Fed’s expected dovish raise, as a result of the disappointing US Personal Consumption Expenditures (PCE) figures, appear to keep AUDUSD purchasers upbeat.

China-inspired confidence in the Asia-Pacific region might also help the pair buyers. Against this environment, US Treasury bond rates stay up, although the S&P 500 Futures show just minor losses. Given the uncertainty surrounding the second-tier Australian statistics and pre-data nervousness, AUDUSD traders may have a slow session before of the US Core PCE – Price Index for December, which is predicted to remain constant at 0.2% MoM.

A cautious mentality in the run-up to the Fed’s desired inflation rate also operates as an upward filter.

The recent weakness in the Australian dollar might be attributed to conflicting Australian data and a cautious mindset ahead of the Federal Reserve’s (Fed) preferred inflation indicator, namely the Core Personal Consumption Expenditures (PCE) – Price Index for December. Nonetheless, Australia’s fourth-quarter (Q4) Producer Price Index (PPI) fell 0.7% year on year, compared to the 1.9% forecast and before.

Furthermore, the Q4 Export Price Index fell to -0.9% QoQ, compared to 6.7% predicted and -3.6% in the previous quarter, while the Import Price Index increased above 0.1% market predictions to 1.8% quarterly readings, vs 3.0% in the previous quarter. With the contradictory specifics of Australian inflation components, the formerly hawkish sentiment around the currency has shifted.