Ella 
In early Asian trading on Thursday, the AUD/USD continued its upward trend and faced resistance near 0.6850. AUD/USD’s gains were supported by a weakening of the U.S. dollar (USD) to its lowest level since July. Market trading in the last week of 2023 is likely to be quiet. AUD/USD is currently trading around 0.6845, up 0.02% on the day.
On Wednesday, the Richmond Fed manufacturing index fell to -11 in December from -5 in November, below expectations of -7. The U.S. dollar index continued its downward trend as investors expected that the Federal Reserve (FED) had ended its interest rate hike cycle and would cut interest rates next year. Fed policymakers set a rate cut of 75 basis points in their December rate forecast, but markets are already pricing in a 150 basis point rate cut next year. This, in turn, has put some selling pressure on the US dollar and constituted a “tailwind” for AUD/USD.
In terms of the Australian dollar, the Reserve Bank of Australia released a hawkish stance to boost the AUD/USD. Minutes from the Reserve Bank of Australia’s most recent meeting showed the Reserve Bank of Australia was willing to pause interest rate hikes to assess the impact of past rate hikes amid encouraging signs of progress.
A weekly report on U.S. jobless claims will be released later on Thursday. Additionally, the trade account and November existing home sales report will be released. The Chicago Purchasing Managers’ Index for December will be released on Friday.
