AUD/USD Lower on Friday as Risk-Off Mood Persists

The AUD/USD pair ended last week on a bearish note, as it plummeted to the 0.7282 low. The risk-loving Aussie managed to print a new 2022 high at 0.7441 last Sunday against the dollar but has fallen into a bearish pattern since.

That said, the AUD appears to have fared positively with the risk-off market mood thanks to gold, as the yellow tapped a new record high at $2,070 last week.

The capital markets fell under the influence of the ongoing geopolitical tensions between Russia and Ukraine as the situation deteriorated. Optimism over a possible diplomatic solution to the crisis faded as Russia continued to strafe Ukrainian cities non-stop since the conflict began two weeks ago.

AUD/USD Traders to Take Cues from US Economic Data Release

As the Reserve Bank of Australia (RBA) maintained a wait-and-see approach to its monetary policy, the market appears to have priced in a possible 0.50% rate hike from the US Federal Reserve this week.

The US recently reported that the Consumer Price Index for February climbed to 7.9% YoY, its highest in about four decades. That said, the Federal Reserve could increase its rates by 0.25%, a move that could spark optimism among stock and risk-asset traders and exert bearish pressure on the greenback.

In the meantime, data from Australia continues to show signs of decent economic recovery alongside rising inflation. The March Consumer Inflation Expectations jumped by an unprecedented 4.9% from 4.6% the month before. That said, the RBA will release the minutes of its latest monetary policy meeting next week, as the country publishes its employment figures for February.

In the US, market participants will focus on inflation and the Fed’s reaction to it, and the latest Retail Sales data.