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  • AUD/USD is rising after closing Thursday modestly lower.
  • US Dollar Index holds above 93.00, stays in negative territory.
  • Annual Core CPI in US is expected to remain steady at 1.6% in August.

The AUD/USD pair advanced to a fresh weekly high of 0.7326 on Thursday but lost its traction in late American session and closed in the negative territory. With the greenback struggling to preserve its strength on Friday, the pair is edging higher and was last seen gaining 0.55% on the day at 0.7295.

DXY retreats toward 93.00 ahead of CPI data

The US Dollar Index (DXY) fell sharply on Thursday after the European Central Bank’s hawkish tone triggered a sharp rally in the EUR/USD pair. However, the risk-averse market environment in the second half of the day provided a boost to the USD and the DXY erased all of its losses and registered small daily gains at 93.35.

On Friday, the DXY is pushing lower with the market mood turning positive. At the moment, the S&P 500 futures gaining 0.75% and the DXY is down 0.2% at 93.15.

In the early trading hours of the American session, the US Bureau of Labor Statistics will release its inflation report. Markets expect the Core Consumer Price Index (CPI) to remain unchanged at 1.6% on a yearly basis in August. Nevertheless, the Federal Reserve uses the Core Personal Consumption Expenditures (PCE) Price Index as its preferred gauge of inflation and the market reaction to CPI figures is likely to remain muted.

Technical levels to watch for