AUD/USD advances towards 0.7000 swiftly, US PCE inflation eyed

• AUD/USD is scaling towards 0.7000 firmly as the DXY is likely to surrender the cushion of 106.00.
• A downbeat performance on the US GDP front has weakened the DXY further.
• Investors will keep an eye on the US PCE inflation measure for further guidance.

The AUD/USD pair is marching towards the psychological resistance of 0.7000 swiftly after concluding the corrective move to near 0.6960 in the late New York session. The asset attempted to establish above 0.7000 on Thursday, however, the downbeat Australian Retail Sales data weakened the aussie bulls and dragged the asset.

The Australian Retail Sales data landed at 0.2%, significantly lower than the expectations of 0.5% and the prior release of 0.9%. Investors should be aware of the fact that the inflation rate has remained firmer in the Australian economy. The Australian Bureau of Statistics, on Wednesday, reported the inflation rate for Q2CY22 at 6.1%. The investing community is aware of the fact that higher energy bills and costly food products have resulted in higher payouts for households.

Therefore, the Retail Sales data should have soared dramatically but a vulnerable performance from the economic data indicates that the overall demand from the retail participants has remained extremely lower. An occurrence of the same pushed aussie on the back foot.

On the dollar front, the US dollar index (DXY) is likely to renew its monthly print as poor US Gross Domestic Product (GDP) has acted as the last nail in the coffin. The annualized GDP for the second quarter improved to -0.9% from the prior release of -1.6% but remained lower than the consensus of 0.5%. The DXY is likely to surrender the cushion of 106.00 as poor GDP data has hurt DXY buyers’ sentiment.

Going forward, investors will focus on the Federal Reserve (Fed)’s preferred Personal Consumption Expenditure (PCE) Price Index inflation indicator to judge the extent of price pressures in the economy. The economic data is seen at 6.7%, higher than the former figure of 6.3%.