Australian Dollar’s reversal from five-month hoghs at 0.6780 has been contained at 0.6700 and the pair is trimming losses on Thursday´s European season with all eyes on Friday´s US data,
The pair has extended its rally this week, buoyed by the hawkish tone of the minutes of the RBA’s last meeting. The Australian central bank kept options open for further tightening if necessary highlighting the divergence with a dovish US Fed.
Later today, the final reading of the Q3 US GDP and initial Jobless claims might provide some impulse to the USD, although the main attraction of the week is Friday´s PCE Prices Index.
The Fed’s inflation gauge of choice is seen to have dropped below the 3% yearly rate for the first time in nearly three years, with the core reading down to 3.3% from 3.5% in October. These figures are not USD-supportive, but a bullish USD reaction as traders square short dollar positions ahead of the data should not be discarded.
The technical analysis team at BNP Paribas sees the Aussie at 0.70 in the next 12 months: “Further support for AUD and NZD is expected from a potential medium-term recovery in China (...) We raise our end-2024 forecasts for AUD/USD to 0.70 from 0.65 and NZD/USD to 0.63 from 0.59.”
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