AUD/USD Falls as US Producer Price Data Raises Rate Hike Bets
The AUD/USD currency pair has been under pressure in early trade on Friday following economic data showing producer prices increasing last month, raising expectations that the Federal Reserve could raise interest rates next week.
Positioning in the AUD/USD shifted from bullish to bearish after the Labor Department published data showing producer prices had edged higher in August, adding further expectations that the Fed will lift its benchmark funding rate when it meets next week.
The Australian dollar could come under further pressure later today when market participants get a read on consumer inflation, which is expected to show core inflation climbing 0.2% last month, taking the annual rate to 3.4%. The report will provide the final piece of the inflation puzzle, with a surprise to the upside likely to significantly increase the likelihood of policy firming next week and trigger fresh selling in the AUD/USD.