• AUD/USD corrects lower but is set to close a third consecutive weekly gain.
• US Michigan Consumer Sentiment Index came in at 63.9 in June vs 60 expected.
• Fedspeak makes the USD holds its ground but it is still vulnerable.

At the end of the week, the AUD/USD bulls seem to have taken a step back, after six consecutive days of gains and the pair retreated to the 0.6860 area. In that sense, the USD managed to hold its ground amid upbeat Michigan Consumer Sentiment Index and hawkish Fed speakers. On the Australian front, eyes are on next week’s Reserve Bank of Australia (RBA) minutes.

UoM data and the hawkish comments of Fed officials give the USD traction

The University of Michigan (UoM) reported on Friday that the Michigan Consumer Sentiment Index came in at 63.9 in June vs 60 expected and accelerated from its previous figure of 59.2. In addition, the five-year Consumer Inflation Expectation from June dropped  to 3% vs the consensus of 3.1%. The data helped the US Dollar find its feet after the recent decline.

In addition, Christopher Waller from the Federal Reserve (Fed) stated that he is concerned with core inflation not seeing progress adding that it may require more tightening. Elsewhere, he mentioned that he is comfortable “doing more” if the data warrants it. It's worth noting that on Wednesday, the revised dot plots from the Federal Open Market Committee (FOMC) showed that members are seeing two more 25 bps hikes this year, so the hawkish stance from the Fed gives the USD traction.

On the other hand, the focus now shifts to Tuesday’s RBA minutes where investors will look for clues as to why Governor Philip Lowe decided to unexpectedly hike rates by 25 basis points to 4.10% in the last monetary policy meeting