- AUD/USD fell on broad US dollar strength, as the greenback rose almost 1% in the US Dollar Index.
- European stock indices fell, while US equity indices rose, depicting a mixed-market sentiment, which benefited the US Dollar.
- US Core PCE rise overshadowed the Australian Retail Sales jump, weighed on the AUD/USD.
The Australian dollar slid for the first day of the week, down 0.37% as the New York session ends at 0.7516 at press time.
On Friday, the market sentiment was mixed as European equity indices fluctuated between winners and losers. Meanwhile, across the pond, US stock indices finished the day with gains between 0.19% and 0.46%.
Despite the risk-on market mood in the New York session, risk-sensitive currencies like the GBP, the NZD, and the AUD, were not able to extend their Thursday rally. Also, the US Dollar strengthened due to several factors like month-end flows, portfolio reshuffling, inflation concerns, and the upcoming Federal Reserve meeting, where market participants expect a bond taper announcement.
Worth noting that US T-bond yields were unchanged during the session, with the 10-year benchmark note ending the week-month at 1.561%.
Hence, AUD/USD sellers were benefited from the market sentiment and rising inflation figures in the US, which, despite remaining steady, spurred demand for the greenback as investors focus turns to the Federal Reserve.
US Core PCE rise overshadowed the Australian Retail Sales jump, weighed on the AUD/USD
On the macroeconomic docket, Australian retail sales bounced up sharply in September after plummeting in the previous three months, where lockdowns were to blame.
Across the pond, the Fed’s favorite gauge for inflation, the US Core PCE, rose by 3.6% for September on a yearly basis, which increased demand for the greenback, as market participants became aware that the Federal Reserve meeting was around the corner. Rising inflations increase the odds of hiking rates sooner than later.