Created
: 2024.09.11
2024.09.11 17:56
The AUD/USD pair manages to defend the 100-day Simple Moving Average (SMA) support and attracts some buyers near the 0.6645 region on Wednesday. Spot prices maintain the bid tone near the 0.6660-0.6665 area through the early European session and for now, seem to have snapped a three-day losing streak to over a three-week low touched on Tuesday.
The US Dollar (USD) struggles to capitalize on its gains registered over the past three days and retreats from the vicinity of the monthly peak amid dovish Federal Reserve (Fed) expectations. Apart from this, a positive tone around the European equity markets is seen undermining the safe-haven Greenback and benefiting the risk-sensitive Australian Dollar (AUD). This turns out to be a key factor offering some support to the AUD/USD pair, though the intraday uptick lacks bullish conviction.
Investors prefer to wait for the release of the latest US consumer inflation figures for cues about the Fed's rate-cut path, which will play a key role in influencing the USD price dynamics and provide a fresh directional impetus to the AUD/USD pair. Any further signs of cooling inflation would lift bets for a larger, 50 basis points rate cut by the Fed in September and weigh heavily on the buck. Meanwhile, the reaction to a stronger US CPI print is likely to be limited, suggesting more USD weakness.
The aforementioned fundamental backdrop supports prospects for a further near-term appreciating move for the AUD/USD pair amid the Reserve Bank of Australia's (RBA) hawkish stance. That said, it will still be prudent to wait for strong follow-through buying before confirming that the recent corrective pullback from a multi-month peak, around the 0.6825 region touched in August has run its course and placing aggressive bullish bets around the currency pair.
Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Wed Sep 11, 2024 12:30
Frequency: Monthly
Consensus: 2.6%
Previous: 2.9%
Source: US Bureau of Labor Statistics
The US Federal Reserve has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank's directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
Created
: 2024.09.11
Last updated
: 2024.09.11
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy