❗️AUD continues to strengthen; Expect a positive RBA report❗️
The Australian Dollar (AUD) recovered from recent losses against the US Dollar (USD) on Friday, driven by USD weakness. The AUDUSD pair, which faced losses in the previous session, got better risk appetite support as investors expect a dovish stance from the Federal Reserve (FED) for early 2024. Reserve Bank of Australia (RBA) meeting minutes expressed a cautious approach, emphasizing the need to evaluate additional data, especially in the context of restraining inflation and housing prices, constitutes an optimistic outlook. With expectations in favor of the RBA avoiding a rate cut in February 2024, the AUD maintained its strength.
The US Dollar Index (DXY) saw modest gains, but weak US data, including a higher-than-expected increase in Initial Jobless Claims and flat Pending Home Sales in November, limited the Greenback's advance. The negative data reinforces expectations of a more accommodative monetary policy from the Fed in the upcoming meeting. Market focus turns to the Chicago Purchasing Managers' Index for December on Friday.
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