Australian Dollar Halts Decline as US Dollar Corrects Lower
The Australian Dollar (AUD) held near a three-month low against the US Dollar (USD) on Friday. The recent downtrend in the AUD/USD pair was largely driven by key economic data from Australia released on Thursday. Moreover, the AUD remained unaffected by mixed economic data from its close trading partner, China.
China’s Retail Sales rose 4.8% year-on-year in October, beating the 3.8% forecast and the 3.2% increase seen in September. Meanwhile, the country’s Industrial Production grew by 5.3% YoY, slightly below the 5.6% forecast but higher than the 5.4% growth recorded in the previous period.
However, the Australian Dollar’s decline may be limited due to less dovish remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock on Thursday. Bullock stated that the current interest rate is quite tight and will remain at this level until the central bank gains confidence in the inflation outlook.
The US dollar held steady near its fresh 2024 high, despite signs of a slowdown in the “Trump trade.” The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, was trading around 107.06, marking its highest level since November 2023.
Markets now focus on the US October Retail Sales data, due on Friday, along with comments from Federal Reserve officials. On Thursday, Fed Chair Jerome Powell noted that the recent performance of the US economy has been “very good,” allowing the Fed room to gradually lower interest rates.
Source: FXStreet
