AUD/USD on the Back Foot Despite AU Inflation Uptick

  • AUDUSD
    (${instrument.percentChange}%)

AUD/USD Analysis

The Reserve bank of Australia had kept rates at 4.1% for the third straight meeting at the beginning of the month. It was able to do that as inflation has been moderating, the economy is sluggish and labor market shows signs of cooling.

On the other hand, policymakers kept more tightening in play and the accounts of the aforementioned decision revealed that a 0.25% hike was discussed [1]. Inflation is still too high and CPI rose 5.2% y/y in August (from 4.9%) according to today's data. Furthermore, employment conditions remain tight, with nearly 65,000 jobs added in August and the participation rate hitting record highs at 67%.

These releases sustain prospects of more hikes by the RBA and AUD/USD reacted higher to today's hot CPI report, but the move was short-lived. USD strength persists after the Fed's hawkish hold, which kept more hikes on the table and pointed to a tighter 2024 path than previously expected, affirming the higher-for-longer approach.

Bears push for new 2023 lows, which will give them a shot at 0.6271, although fresh impetus would likely be needed for taking it out. On the other hand, the move starts to look stretched and AUD/USD may be able to find some reprieve. The upside is unfriendly though and the pair has failed repeatedly above 0.6500.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 21 May 2024 https://www.rba.gov.au/monetary-policy/rba-board-minutes/2023/2023-09-05.html

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.