As the AUD/USD Continues Its Ascent Above 0.6800, It Awaits US PCE Data

The Australian Dollar continues to maintain its bullish momentum, as the pair has surpassed the 0.6800 level, which was supported by widespread Dollar weakness ahead of the release of the US PCE Prices Index later today.

The Australian is poised for a weekly increase of nearly 2%, building upon a comparable showing the previous week. The hawkish RBA minutes, which were published earlier this week, emphasized the contrast with the dovish Federal Reserve, thereby infusing the pair with renewed momentum.

According to data released on Thursday, the third quarter growth of the U.S. economy was comparatively sluggish than what was initially anticipated. Annual growth for the US economy in the third quarter was revised from the previous estimate of 5.2% to 4.9%, with manufacturing and inflation data providing further evidence of a slowdown in momentum.

Speculators await the US CPI data in this scenario in order to validate their assessments of the Fed rate outlook. Nearly 75% of futures markets anticipate that the easing cycle will commence in March and that the US central bank will reduce interest rates by 150 basis points over the course of the following year.

The ING Technical Analysis team anticipates that the Australian dollar will outperform the majority of its competitors in the coming year: "Currencies that are poised to challenge the dollar will require assistance." Furthermore, both the AUD and NOK possess undervaluation as a weapon (...) The currencies that are deemed most undervalued in our medium-term fair value model are those that deviate significantly from higher export prices.