It's been all red today for the AUD/USD as the Aussie has continued to show weakness as Asian trading begins to wrap up for the day.
Traders have seen the AUD spike higher over the last few weeks as it neared 80 cents, however Wednesday's session marked an important day for the currency as inflation numbers gave us an insight into how the economy was tracking.
Unfortunately for bulls, CPI data came in below expectations, with Q2 headline inflation coming in at 0.2% versus estimates of 0.4%.
This caused a spike lower and the AUD/USD hasn’t been able to regain its highs.
Later in the session, RBA board member Lowe spoke about inflation and said that there was no reason for the RBA to raise rates in line with the other central banks. He also pointed out that inflation was well in line with the RBA’s expectations.
With all the bearish data and no immediate calls for a hike in rates and as such the AUD/USD might have trouble pushing higher.
On Wednesday, the FOMC will release their updates on US interest rates.
Although traders aren’t expecting any kind of change, should there be any kind of slightly hawkish tone in their language, it might give the AUD/USD some more pressure to the downside for the rest of the session.
Further weakness will provide good opportunities throughout the European and US sessions as the AUD continues its slide lower.