Australian Dollar loses gains as US Dollar strengthens despite a bumper Fed rate cut
The Australian Dollar (AUD) advances against the US Dollar (USD) on Friday, extending its gains for the third successive session. The AUD/USD pair continues to appreciate as soft United States (US) jobs data outweighs hotter inflation, bolstering expectations of a Federal Reserve (Fed) 25 basis-point rate cut next week. The chance that the US central bank will cut by a half percentage point also edges higher.
The AUD found support as recent robust Australian economic data reduced prospects of further Reserve Bank of Australia (RBA) rate cuts, with swaps now pricing in an almost 86% chance of unchanged policy in September.
Australia’s Consumer Inflation Expectations rose to 4.7% in September from August’s five-month low of 3.9%. The increase reflected stronger domestic demand, which in turn heightened concerns over renewed inflationary pressures. RBA Governor Michele Bullock highlighted that the private sector has begun to show “a little bit more growth,” which she described as positive for the economy.
Source: FXstreet
