After a week of losses, AUD/USD reversed course in the American session on Friday, climbing toward 0.6500 and recouping part of its weekly decline.
Powell sparks USD selloff
Speaking at the Jackson Hole Symposium, Federal Reserve Chair Jerome Powell indicated a shift to a flexible inflation-targeting framework, removing the previous “makeup” strategy for inflation.
He also highlighted rising downside risks to the labor market and suggested that inflationary effects from tariffs would likely be short-lived.
Market reaction
Powell’s dovish tone sent the US Dollar sharply lower, with the USD Index down 0.7% at 97.90 at the time of writing.
After four consecutive days of losses, AUD/USD posted strong gains on Friday, boosted further by positive market sentiment.
Meanwhile, Wall Street responded positively, with main indexes rising between 1.5% and 1.8%, adding to the pressure on the USD.
