AUDUSD Exchange Rate Jumps After Inflation Data

TheAUDUSD exchange rate was higher after the latest inflation data put rate cut hopes on hold. 

AUDUSD – Daily Chart

AUDUSD – Daily Chart 

The AUDUSD exchange rate rallied above 0.65 on Wednesday. Although the pair has given up some of those gains, it is still above support. 

Markets were surprised by disappointing inflation numbers from Australia and moved to price in a minimal chance or around 4% of a rate hike by August. 

The Australian Bureau of Statistics data showed that the consumer price index (CPI) rose 1% in the first quarter, above market forecasts of 0.8%. The annual pace of CPI inflation slowed to 3.6% from 4.1%, also higher than the forecast of 3.5%. 

“It’s higher than we were expecting, higher than what the market was expecting, and higher than what the RBA would be expecting so that 1% number will be something that they’ll be alarmed about,” said Madeline Dunk, an economist at ANZ. 

“I think the RBA will want to see those services and non-tradables numbers decelerate in Q2 and if we don’t see that there is a chance we see those rate cuts get pushed out to next year.” 

Westpac pushed out the expected timing of the first rate cut from September to November, given the slower progress on disinflation and the healthy jobs market. 

The Reserve Bank of Australia left interest rates at 4.35% during its last three meetings as confidence grew that inflation was on track to return to its target band of 2-3% by late 2025. 

Investors have been reducing rate cut expectations globally as signs emerge that lowering inflation may not be as easy as initially thought.  

The US economy will now deliver growth data on Thursday and the Fed’s favourite PCE consumption data on Friday, meaning the next week or two should have enough clarity for FX markets to trend. 

Weakness in GDP could speed up rate hikes, but a stubborn PCE number would slow them down.

Recent News
Start Trading Now !
Try our demo account for free to learn trading. When you’re ready, switch to a live account and start trading for real.
Popular posts
ATFX

Account Registration Unavailable

Please note that you may be accessing this page from outside Australia. For retail and professional inquiries regarding AT Global Markets (Australia) Pty Ltd, kindly reach out to us at [email protected].

ATFX

🌍 Welcome to ATFX!

To provide you with the best trading experience in Iraq, please visit our localized website:

There, you’ll find all products, services, and contact information tailored specifically for you. Thank you for choosing ATFX!

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not available for Hong Kong investors and not related to any corporation licensed by the Securities and Futures Commission in Hong Kong.

All the information and materials posted on this website should not be regarded as or constitute a distribution, an offer, solicitation to buy or sell any investments.

使用限制:本網站的產品及服務不適用於香港投資者及與任何香港證監會持牌公司無關。

網站內部的信息和素材不應被視為分銷,要約,買入或賣出任何投資產品。

ATFX

Restrictions on Use

AT Global Markets (UK) Limited does not offer trading services to retail clients.
If you are a professional client, please visit https://www.atfxconnect.com/