Later today, housing sector data may influence US-Australian interest rate differentials and AUD/USD trends.
A larger-than-expected fall in existing home sales could signal waning consumer confidence in the economy. Home buyers may delay purchases in a weakening economic environment. Falling sentiment may suggest a pullback in consumer spending and a softer inflation outlook.
A softer inflation outlook would support a more dovish Fed stance, narrowing the rate differential in favor of the Aussie dollar. A narrower rate differential would send AUD/USD toward $0.66.
Conversely, rising existing home sales would indicate a resilient US economy, potentially delaying Fed rate cuts. A more hawkish Fed rate path could widen the rate differential and push AUD/USD toward the 50-day EMA.
