**AUD/USD Extends Bullish Run, Hits 47-Week High as Greenback Weakens**
*Based on reporting by Haresh Menghani, FXStreet (condensed and expanded with additional analysis)*
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The Australian dollar (AUD) continued its impressive climb against the US dollar (USD), with the pair surging to a 47-week high, trading near 0.6700 as of Friday, June 21, 2024. This performance underlines a robust resilience in the AUD, which has made notable gains on the back of a weakening greenback and positive domestic cues.
## Background: Overview of Recent AUD/USD Movements
Over the past several weeks, AUD/USD has shown sustained upward momentum, initially propelled by strong economic readings from Australia and later fueled by broad-based US dollar weakness. On Friday, the pair touched 0.6713, reaching a level not seen since mid-July of 2023. Previous sessions saw a series of higher lows and higher highs, confirming the bullish trajectory.
### Key Factors Supporting the AUD
#### 1. Weakening US Dollar
The US dollar index (DXY), which measures the USD against a basket of major currencies, declined to its lowest in more than five weeks. Several elements contributed to this slide:
– **Federal Reserve Policy Expectations**: Markets have increasingly priced in the likelihood of interest rate cuts from the US Federal Reserve, likely to begin as early as September 2024. Diminished expectations for further tightening have significantly weighed on the USD.
– **US Economic Data**: Recent economic indicators in the US, including softer-than-expected retail sales and jobless claims, have reinforced views that the economy may be slowing, adding downward pressure on the dollar.
#### 2. Robust Australian Employment Data
Australian economic fundamentals have strengthened the AUD’s position:
– **Employment Report**: Australia’s labor market showcased its resilience in May 2024. According to the Australian Bureau of Statistics (ABS), the unemployment rate fell to 4.0%, down from 4.1%, while the economy added a net 39,700 jobs, surpassing analyst forecasts.
– **Wage Growth and Inflation**: Wage growth continues to support underlying inflation pressures in Australia, prompting the Reserve Bank of Australia (RBA) to maintain a hawkish stance relative to many global peers.
#### 3. Reserve Bank of Australia Policy Outlook
The RBA has maintained an alert posture on inflation, signaling a readiness to act if price pressures do not recede. At the June policy meeting, RBA Governor Michele Bullock reaffirmed the central bank’s commitment to bringing inflation back to target, offsetting dovish expectations evolving elsewhere, specifically in the US and Europe.
#### 4. Commodity Prices and Risk Sentiment
Australia’s status as a major exporter of commodities, including iron ore, coal, and liquefied natural gas, continues to underpin the AUD. The following factors have been supportive:
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