AUD/USD gains on rising inflation expectations, weakening US dollar

AUD/USD showed mild strength on Thursday, supported by increasing domestic inflation expectations and a retreating US dollar. Rising Australian inflation expectations have bolstered the case for the Reserve Bank of Australia to maintain its hawkish stance, providing fundamental support for the Aussie dollar. The pair's upward momentum has been further aided by broad-based US dollar weakness, as traders reassess Federal Reserve rate expectations amid mixed economic signals. Market participants are closely monitoring upcoming Australian economic data releases, which could either reinforce or challenge current inflation projections. Technical indicators suggest the pair maintains a constructive bias in the near term, though significant resistance levels loom overhead. The combination of domestic inflation pressures and dollar weakness creates a favorable environment for AUD/USD bulls, though traders should remain cautious of potential reversals if US economic data surprises to the upside.