- AUD/USD pair stretches higher despite broad USD strength.
- US Dollar Index advances to fresh two-week highs above 97.70.
- US economy expands by 2.1% in third quarter as expected.
Despite the broad-based USD strength on Friday, the AUD/USD pair climbed above the 0.6900 handle and now looks to post weekly gains for the third straight week.
USD ends week on a strong note
Earlier in the day, the data published by the US Bureau of Economic Analysis confirmed that the US economy expanded by 2.1% on a yearly basis in the third quarter. Additionally, Personal Income in the US increased by 0.5% on a monthly basis in November and the core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred gauge of inflation, came in at 1.6% annually as expected.
The US Dollar Index capitalized on the data and rose to its highest level in two weeks at 97.74 and was last seen adding 0.32% on the day at 97.72.
However, the upbeat jobs report from Australia on Thursday seems to be keeping the demand for the AUD intact as it’s seen as a development that would keep the Reserve Bank of Australia refrain from cutting rates further in the near-term.
The Australian economy added 39.9K jobs in November and the unemployment rate fell to 5.2% from 5.3%.
Commenting on the data, Sean Callow, Senior Currency Strategist at Westpac, noted that the probability of a rate cut in February fell to 45% from 60% after the data.
Technical levels to watch for
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