The Australian Dollar continues to lose ground after the release of higher-than-expected US PMI data.
Australian equities faced pressure due to the lower commodity prices amid hawkish sentiment surrounding the Fed.
US Dollar gained ground after FOMC Minutes suggested a lack of progress on inflation.
The Australian Dollar (AUD) continues its losing streak for the fourth successive session on Friday, possibly driven by risk aversion. The AUD/USD pair experiences downside as the US Dollar (USD) advances on hawkish sentiment surrounding the Federal Reserve (Fed) of maintaining higher policy rates for an extended period.
The Australian Dollar came under pressure as the Consumer Inflation Expectation of future inflation over the next 12 months fell to 4.1% in May from 4.6% in April, marking the lowest level since October 2021. This has increased the risk of inflation remaining above the target for an extended period. The latest Reserve Bank of Australia (RBA) meeting minutes showed that the policymakers agreed that it was challenging to either rule in or rule out future changes in the cash rate.
The US Dollar (USD) extends its gains as higher-than-expected Purchasing Managers Index (PMI) data from the United States (US), was released on Thursday. The data raised concerns that interest rates will remain elevated for much more time, sending Treasury yields higher. Additionally, the latest Federal Open Market Committee (FOMC) Minutes showed that Fed policymakers expressed concerns about the lack of progress on inflation, which was more persistent than expected at the start of 2024.
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