Aussie Dollar Noisy as Headlines Continues to Pound the Wires

The Australian dollar has seen a lot of noisy trading on Friday, as the headlines around the world, especially in the US, continue to have traders somewhat lost.

AUD/USD

The Australian dollar has been very noisy during trading on Friday as there has been a lot of noise and headlines hitting the wires that continue to cause chaos. The first one of course was the fact that the core PCE numbers in the United States were hotter than anticipated, thereby suggesting that maybe the Federal Reserve has to think about staying higher for longer, keeping those rates higher than expected, for much longer, something the markets have disdain for.

But now we have to ask questions due to the advanced GDP being so weak in America, but a lot of that had to do with the fact that the government is shut down, at least partially, and that does distort a lot of the information. Furthermore, we had the Supreme Court decision that tosses out some of the Trump tariffs, at least the way it was done, and therefore a lot of uncertainty has entered the market.

Interest Rate Divergence and Technical Support

If we can break above the 0.7150 level we can continue the overall march higher by the Australian dollar, which does make a certain amount of sense because the Reserve Bank of Australia continues to look very hawkish and is expected to raise rates a couple of times this year while the Federal Reserve, at least until today, was expected to cut at least a couple of times.

So ultimately, I think this is a situation where short-term dips continue to get bought into with the 0.70 level offering support followed by the 0.69 level. I have no interest in shorting, at least not right now, and the Australian dollar continues to be very strong overall.