The AUD/USD pair falls sharply to near 0.6180 in Friday’s North American session. The Aussie pair slumps as the US Dollar (USD) gains ground after a three-day losing streak. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rises to near 109.20.The Greenback gains as the market sentiment is cautious ahead of President-elect Donald Trump’s inauguration ceremony on Monday. Market participants expect Trump will release updated tariff plan sooner after joining the White House, a scenario that would lead to a global trade war. The impact will be favorable for growth and inflationary pressures in the United States (US), which would force the Federal Reserve (Fed) to keep interest rates at their current levels for a longer period.Earlier, the US Dollar faced selling pressure after the release of the US Consumer Price Index (CPI) data for December, which showed that the core inflation decelerated to 3.2%, against estimates and the prior release of 3.3%. This led to a slight acceleration in Fed dovish bets.According to the CME FedWatch tool, traders are pricing in more than one 25-bps interest rate reduction this year, seeing the first coming in the June meeting.Meanwhile, the Australian Dollar (AUD) weakens despite China’s Q4 Gross Domestic Product (GDP) data came in stronger than expected. Compared to same quarter of the previous year, the Chinese economy expanded by 5.4%, faster than estimates of 5% and the reading of 4.6% recorded in the previous quarter.Historically, the Australian Dollar gets benefitted by China’s upbeat economic data, being a close trading partner to China.More By This Author:USD/CAD Jumps To Near 1.4430 As Investors Turn Cautious Ahead Of Trump’s Inauguration USD/JPY Bounces Back From Four-Week Low Of 156.00 As US Dollar Gains Ground EUR/USD Trades Cautiously As Focus Shifts To Trump’s Inauguration
