AUD/USD jumps to 0.6650 ahead of Aussie Retail Sales data
|- AUD/USD moves higher to 0.6650 ahead of crucial Australian economic data.
- Investors expect that the Fed will consider rate cuts in the last quarter of this year.
- Fed policymakers emphasize the need to maintain interest rates at restrictive levels.
The AUD/USD pair climbs to 0.6650 in Monday’s New York session. The Aussie asset rises as the US Dollar remains under pressure even though investors expect that the Federal Reserve (Fed) will not cut interest rates before the fourth quarter of this year.
The market sentiment is slightly cautious due to thin trading volume as United States markets are closed on account of Memorial Day. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is slightly down near 104.65.
Market speculation for the Fed reducing interest rates from the September meeting has come downs slightly below 50% from 62% a week ago, as per the CME FedWatch tool. The sharp decline in Fed rate-cut prospects is the outcome of policymakers’ hawkish interest-rate guidance and strengthening US economic outlook.
Fed officials have been underscoring the need to maintain the current interest rate framework for a longer period as they believe that the one-time decline in price pressures reported by April’s Consumer Price Index (CPI) report is insufficient to gain confidence that progress in the disinflation process has resumed after stalling in the January-March period.
Meanwhile, the Australian Dollar exhibits strength ahead of the release of the monthly Retail Sales and annual Consumer Price Index (CPI) data for April, which will be published on Tuesday and Wednesday.
The Retail Sales are estimated to have grown by 0.2% after contracting 0.4% in March. In the same period, the inflation data is expected to have softened to 3.4% from 3.5%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.