After the Reserve Bank of Australia meeting on December 9, the rhetoric of Governor Michele Bullock became noticeably more hawkish. Both her statements and the published meeting minutes indicate that inflation has once again taken center stage, and the possibility of an additional interest rate hike was actively discussed as early as last month.

Consumer inflation in the country continues to accelerate: in October, the annual rate reached 3.8%, up from 3.6% in September and 3.2% in August. The November report will be released next week. Wage growth data also suggest that price pressures are intensifying. If this trend persists, the likelihood of an RBA rate hike will increase, supporting a strengthening of the Australian dollar.

At the same time, the situation in the United States is developing in the opposite direction. The Federal Reserve remains in the middle of a monetary easing cycle. Recent economic data, including jobless claims statistics, have been fairly positive. Nevertheless, political factors may add uncertainty: President Donald Trump is considering replacing Jerome Powell with a more dovish leader once his term ends in May.

Against the backdrop of New Year holidays in Japan and China, trading activity on Friday remains subdued. Market focus remains on the release of the U.S. manufacturing activity index (S&P Global Manufacturing PMI), the data from which matched expectations.

From a technical perspective, oscillators on the daily chart remain in positive territory, but prices failed to hold above the round 0.6700 level. Support is now provided by the 9-day EMA near 0.6680. If this level fails to hold, prices could accelerate their decline toward 0.6660.

However, if prices manage to break back above the round 0.6700 level, they would be poised to challenge the December high.