- AUD/USD struggles to preserve its modest intraday gains amid a pickup in the USD demand.
- A turnaround in the risk sentiment, aggressive Fed rate hike bets boost the safe-haven buck.
- Traders now look forward to US macroeconomic releases for some meaningful opportunities.
The AUD/USD pair attracts fresh sellers in the vicinity of mid-0.6300s on Friday and surrenders its modest intraday gains to a four-day high. The pair slips below the 0.6300 mark during the first half of the European session and is now flirting with the daily low amid the emergence of some US dollar dip-buying.
The latest optimistic move in the equity markets witnessed since the US session on Thursday fizzles out rather quickly amid worries about a deeper global economic downturn. The anti-risk flow helps revive demand for the safe-haven greenback and exerts some downward pressure on the AUD/USD pair. Apart from this, the prospects for a more aggressive policy tightening by the Fed favour the USD bulls.
The US Bureau of Labor Statistics reported that the core inflation (excluding food and energy prices) registered the biggest gain since August 1982. The hotter CPI report reinforces bets for the fourth consecutive 75bps Fed rate hike in November. This, along with the potential economic fallout from fresh COVID-related lockdowns in China, validates the near-term negative outlook for the AUD/USD pair.
That said, technical indicators on short-term charts are hovering around the oversold territory and warrant some caution for bearish traders. Nevertheless, the AUD/USD pair remains on track to register losses for the fifth successive week. Market participants now look forward to the release of the US monthly Retail Sales figures, due later during the early North American session, for a fresh impetus.
Friday's US economic docket also highlights the Prelim Michigan Consumer Sentiment and Inflation Expectations Index. This, along with the US bond yields and speeches by influential FOMC members, will drive the USD demand and provide a fresh impetus to the AUD/USD pair. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities on the last day of the week.