Australian dollar shows resilience despite US data volatility
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Daily Currency Update
The Australian Dollar (AUD) was little changed against the US Dollar (USD) on Friday, as traders digested a fresh batch of mixed US macroeconomic data that sparked short-term volatility but failed to establish a clear directional trend. At the time of writing, the AUD/USD pair is trading around 0.6535, largely unchanged on the day after a series of sharp intraday moves following the release of the US Consumer Price Index (CPI) and S&P Global Purchasing Managers’ Index (PMI) reports. The US CPI data offered limited surprises, showing that inflation pressures remain persistent but broadly in line with expectations. Meanwhile, the latest PMI readings painted a more nuanced picture of the US economy—manufacturing activity remained subdued, while the services sector showed modest resilience. The mixed signals left investors recalibrating their expectations for the Federal Reserve’s interest rate outlook, which in turn kept the USD’s momentum in check. From a technical standpoint, AUD/USD continues to consolidate within a narrow 0.6480–0.6540 range, suggesting a period of indecision after the pair’s recent breakdown on the daily chart. Momentum indicators remain neutral, with traders awaiting a decisive catalyst to confirm the next directional move. A sustained break above 0.6550 could open the door toward the 0.6600 handle, while a drop below 0.6480 would expose the pair to further downside pressure toward the 0.6420 area. Looking ahead, attention will turn to next week’s key data releases from both the US and Australia, including Australian retail sales figures and updated commentary from the Reserve Bank of Australia (RBA). Market participants will be watching closely for any signs of divergence in policy outlooks that could provide fresh impetus for the AUD/USD pair.Key Movers
The US Dollar Index (DXY), which measures the Greenback’s performance against a basket of six major currencies, traded near 99.00 on Friday, holding modest weekly gains of around 0.4%. Despite muted price action, the dollar remains under scrutiny as investors assess the implications of softer US inflation data and improving business activity indicators for the Federal Reserve’s near-term policy outlook. According to data released by the US Bureau of Labor Statistics (BLS), the Consumer Price Index (CPI) rose 0.3% month-on-month in September, slightly below the 0.4% consensus forecast and easing from August’s 0.4% gain. On an annual basis, headline inflation came in at 3.0%, missing expectations of 3.1%, though still edging higher from 2.9% in August. The Core CPI, which strips out volatile food and energy prices, advanced 0.2% MoM and 3.0% YoY, both figures also undershooting market estimates. The softer inflation readings reinforced investor confidence that the Federal Reserve will maintain its easing trajectory following September’s rate cut. Market pricing now fully anticipates another 25-basis-point reduction at the upcoming October 29–30 FOMC meeting, as policymakers continue efforts to support growth amid moderating inflation pressures and mixed labor market signals. Meanwhile, the latest survey data offered a more upbeat picture of US business activity. The S&P Global Flash Composite PMI climbed to 54.8 in October from 53.9 in September, marking the strongest private-sector expansion in three months. The improvement was driven by a rebound in the services sector, where the PMI jumped to 55.2, while the manufacturing gauge edged higher to 52.2, signaling modest but sustained expansion across both segments of the economy. In the currency markets, the dollar’s mixed performance reflects the tug-of-war between easing inflation and resilient economic activity. A sustained break above the 99.30 level on the DXY could expose the next resistance near 99.70, while a dip below 98.60 would suggest renewed bearish momentum. Looking ahead, traders will focus on upcoming Fed communications and key economic data—including the Personal Consumption Expenditures (PCE) Price Index and nonfarm payrolls report—for further confirmation of the central bank’s policy path heading into year-end.Expected Ranges
- AUD/USD: 0.6400 - 0.6600 ▲
- AUD/EUR: 0.5500 - 0.5700 ▲
- GBP/AUD: 2.0300 - 2.0500 ▼
- AUD/NZD: 1.1200 - 1.1400 ▲
- AUD/CAD: 0.9000 - 0.9200 ▼