AUD/USD FLUCTUATES AROUND 0.6877 THOUGH ENDED THE WEEK WITH LOSSES

AUD/USD ended the week with a loss, a change in sentiment and speculation about an aggressive Federal Reserve. Last week, US inflation data supported the dollar’s recovery as US Treasury yields moved north. AUD/USD follows a tight economic calendar in Australia and the US next week. The Australian dollar (AUD) ended the week lower at . after hitting an intraday high of 0.688 , falling on risk-off momentum as Wall Street closed the session down 0.26% to 0.58%, while the Dow Jones earned 0.39 per%. opening price At the time of writing, AUD/USD was trading at 0.6877 at at the close of global equities, as investors increased their bets on more-than-expected tightening by the US Federal Reserve. Last week’s US inflation reports for January, namely the Consumer Price Index (CPI) and the Producer Price Index (PPI), were lower than December’s data but beat estimates. In fact, the highlight of the week was the monthly PPI, which beat the consensus and the previous month’s number, justifying the harsh commentary of Fed officials during the week. On Thursday, Cleveland and St. Louis Federal Reserve Presidents Loretta Mester and James Bullard that they see strong evidence for a 50 basis point rate hike in the upcoming meetings. Federal Reserve Governor Michell Bowman announced today that the US central bank has not stopped tightening monetary conditions and reiterated that „we have not defeated inflation”. Meanwhile, Richmond Federal Reserve President Thomas Barkin said the return of inflation to the Fed’s 2 percent target „will require more rate hikes,” reporters said after the event in Rosslyn, Virginia. “How many of them do I think we need to see… what you see is progress, but slow progress is not seeing growth.” Elsewhere in the Asian session, Reserve Bank of Australia (RBA) Governor Philipe Lowe said that based on incoming data, the RBA’s board assessed that additional interest rates were „Inflation must be to return to its goal and that this period of high inflation is only temporary.” „If we do not get inflation under control and bring it down in time, the end result will be even higher interest rates and more. unemployment,” said Lowe. Given the backdrop and estimates for a worse Australian labor market for the date revealed on Wednesday, the US dollar (USD) eased and weighed on the Australian dollar. The AUD/USD pair fell from around 0.6989 to a weekly low of 0.6811 WHAT TO WATCH Australian economic paper includes manufacturing, services and composite PMI indices, the Composite Leading index and the wage price index. In the US, the calendar shows fourth-quarter GDP estimates, previous jobless claims, the Federal Reserve’s preferred inflation gauge and the University of Michigan’s final reading on consumer sentiment.

Michael Cooper

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