AUD/USD Rises after Australian CPI Inflation Jump
AUD/USD Analysis
Today's data showed that Headline CPI jumped 5.1% in the first quarter of 2022 (year-over-year), from 3.5% prior. The Trimmed Mean, which excludes large price rises and falls, rose to 3.7% year-over-year, the highest level since March 2009.
The Reserve Bank of Australia (RBA) is far behind is major counterparts in the monetary tightening path, but has been recently moving towards a more hawkish direction. In February it had concluded its asset purchases program, while in the last meeting in March, it had dropped the "patient" pledge.
Today's inflation figures support a more hawkish stance and we will have to see when the RBA will be ready to move on interest rates. The next monetary policy decision is due next week, ahead of Australian Federal Elections in late May.
AUD/USD moved to the offensive after today's data and tries to end its five-day losing streak. It now has the EMA100 (0.7230) in its crosshairs, but it will likely need fresh impetus to surpass it and look towards the 200Days EMA (0.7330).
Despite today's rally, the pair runs a poor month and its fifth straight losing week, with immediate risk on the downside, as long as it remains below the EMA100. Furthermore, the monetary policy differential between the Fed and the RBA remains unfavorable, while there are many risk factors that can weigh on sentiment.
As such, there is still risk of fresh monthly lows (0.7119), but those of 2022 (0.7032) are distant at this stage.
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. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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