- AUD/USD lost its traction in early European session.
- US Dollar Index posts modest gains above 90.00.
- Investors await Personal Income, Personal Spending and PCE inflation data from US.
The AUD/USD pair closed virtually unchanged on Thursday and came under renewed bearish pressure during the European trading hours on Friday. As of writing, the pair was trading at its lowest level since Monday at 0.7720, losing 0.25% on a daily basis.
Eyes on US data
The USD’s market valuation continues to impact AUD/USD movements ahead of the weekend. Currently, the US Dollar Index is rising 0.14% on the day at 90.13. The modest increase seen in the benchmark 10-year US Treasury bond yield seems to be helping the USD find demand ahead of high-tier macroeconomic data releases.
The US Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) Price Index for April. Investors expect the Core PCE Price Index, the Fed’s preferred gauge of inflation, to rise to 2.9% on a yearly basis from 1.8% in April. A strong PCE inflation reading could provide a boost to US T-bond yields and allow the USD to continue to outperform its rivals.
Meanwhile, S&P Futures are up 0.4% on the day. In case Wall Street’s main indexes manage to open in the positive territory following the data releases, AUD/USD downside is likely to remain limited in the second half of the day.
Personal Spending, Personal Income and the University of Michigan’s Consumer Sentiment Index data will be featured in the US economic docket as well.
Technical levels to watch for