The AUD/USD pair is holding onto gains near a three-week high of 0.6640 in Friday’s European session. The Aussie asset is showing strength as the US Dollar (USD) struggles to recover from a fresh 10-day low driven by upbeat United States (US) Retail Sales data for July and lower-than-expected Initial Jobless Claims for the week ending August 9.
The US Dollar Index (DXY) is edging lower to near 102.85, tracking the Greenback’s value against six major currencies.
Recent data shows that US Retail Sales grew at a robust pace of 1% from estimates of 0.3% after a contraction in June. Additionally, the number of Americans filing for unemployment benefits for the first time was lower at 227K than estimates of 235K and the prior release of 234K.
Investor confidence in the Federal Reserve (Fed) to begin reducing interest rates from the September meeting remains strong, leading to a firm market sentiment. S&P 500 futures have posted gains in the European session, indicating a strong risk appetite among investors. 10-year US Treasury yields are near 3.91%.
Meanwhile, the Australian Dollar (AUD) is performing well amidst concerns that the Reserve Bank of Australia (RBA) may tighten its monetary policy further. Upbeat Aussie Employment data released on Thursday adds to evidence that price pressures could remain persistent. The data shows that fresh payrolls were higher at 58.2K compared to estimates of 20K and the prior release of 52.3K.
Australian Dollar FAQs
- Interest rates set by the Reserve Bank of Australia (RBA)
- Price of Iron Ore, Australia’s biggest export
- Health of the Chinese economy, Australia’s largest trading partner
- Inflation, growth rate, and Trade Balance in Australia
In conclusion, the current market conditions suggest a positive outlook for the AUD/USD pair as the US Dollar struggles and the Australian Dollar remains strong. The upcoming Fed meeting in September could further impact the currency pair, so investors should stay informed and monitor key economic indicators to make informed investment decisions.