• Australian Dollar could gain ground on bullish momentum.
• Australia's Dollar cheered the improved prices of copper and iron.
• US Dollar could extend its gains following the firmer-than-expected US GDP figures.
• US GDP Annualized (Q4) came in at 3.3% above the market consensus of 2.0%.

The Australian Dollar (AUD) strives to build on its recent gains for the second consecutive session on Friday. The bullish momentum seems to be resurfacing, supporting a notable upward movement in the AUD/USD pair. Interestingly, the Australian Dollar strengthens even in the face of an improved US Dollar (USD), despite the backdrop of lower US Treasury yields. However, the volatility is expected to subside as financial markets are closed in observance of the Australia Day Holiday.

Australia's Dollar reacted positively to the favorable performance of copper and iron. Additionally, the recent news mentions additional stimulus measures by the People's Bank of China (PBoC). However, the Reserve Bank of Australia (RBA) is still expected to reduce borrowing costs later this year. Changes to the stage three tax cut package might introduce a slight delay in the timeline for the first rate cut, potentially pushing it back by a couple of months.

The Reserve Bank of Australia's (RBA) Bulletin suggests that businesses, over the last six months, have generally foreseen a slowdown in their price growth. The prevailing expectation is that, on average, prices will remain above the RBA's inflation target range of 2.0–3.0%.

The US Dollar Index (DXY) could attempt to capitalize on recent gains following the firmer-than-expected US GDP figures, which further reinforced the already resilient stance of the United States (US) economy. The US Gross Domestic Product Annualized (Q4) reported a reading of 3.3% against the previous reading of 4.9%, exceeding the market consensus of 2.0%.

US Treasury Secretary Janet Louise Yellen has remarked that the robust performance of the US economy in the fourth quarter is viewed as a positive development and is not likely to pose challenges in terms of inflation. Yellen attributes the strong Q4 GDP data to vigorous and healthy spending, coupled with productivity improvements. She further emphasizes that there is nothing in the GDP report that suggests a threat to the prospect of a 'soft landing' scenario for the US economy.

Traders are poised to closely monitor the upcoming Personal Consumption Expenditures (PCE) Price Index data on Friday. Following the release of the GDP report, the US Bureau of Economic Analysis is set to publish the PCE Price Index data, providing insights into the monthly changes in both Personal Spending and Personal Income