AUDUSD Moved by Fall in Australian Inflation

This month, the Australian dollar has shown remarkable strength, with the AUD/USD pair climbing 4.5 cents from its low point in early August, when it dropped below 0.6350, marking its lowest level of the year. The pair quickly rebounded, gaining over 400 pips and breaking above the upper boundary of its previous range near 0.67.

AUD/USD Chart Daily – Stalling at July’s High

It reached its highest level of the year yesterday, nearing the 0.68 mark, before pausing as markets awaited Australia’s July CPI inflation report. On the daily chart, the AUD/USD pair remains strong, driven by the Reserve Bank of Australia’s (RBA) hawkish outlook on interest rates. The minutes from the RBA’s August meeting last week indicated that the cash rate is expected to remain unchanged, highlighting the central bank’s cautious approach to managing inflation concerns.

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July CPI Inflation Report from Australia

CPI Australia
  • Australia’s Weighted CPI YoY: Came in at 3.5%, slightly above the expected 3.4%.
  • Prior YoY Reading: Last month’s year-over-year CPI was 3.8%.
  • Weighted CPI YoY: The year-on-year weighted CPI remained consistent at 3.5%, compared to the 3.4% forecast.
  • Seasonally Adjusted CPI YoY: Recorded a 3.6% increase, down from the previous 3.8% (revised from an initial 3.9%).
  • Seasonally Adjusted CPI MoM: Remained flat at 0.0%, compared to a 0.3% increase last month (which was revised down from 0.4%).

Australia’s latest inflation data shows a slight decrease in price pressures compared to the previous month, with both the weighted CPI and the seasonally adjusted year-on-year CPI figures coming in lower. The month-on-month change in CPI remained flat, suggesting that inflation may be stabilizing. This moderation in inflation could influence the Reserve Bank of Australia’s future rate decisions, potentially leading to a cautious approach to monetary easing. However, the RBA will likely keep a close watch on economic indicators to ensure inflation is kept under control while supporting economic growth.

AUD/USD Live Chart

AUD/USD
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Skerdian Meta
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Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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