AUD - Australian Dollar

The Australian dollar tracked sideways through trade on Tuesday amid rising concern transitory inflation will morph into longer-run price pressures. Elevated commodity prices and a shortage of labor supply across the global economy have prompted an uptick across key inflation indicators like PPI and PMI data sets, raising fears Central banks will be forced to unwind accommodative policy platforms ahead of a full economic recovery. The AUD maintained a narrow range, bouncing between 0.7820 and 0.7855 as investors look to Wednesday’s US consumer price index print. While CPI data isn’t the Federal Reserves preferred measure of inflation, it will provide a key insight into how rising input costs are translating through to end consumer prices. A strong read could fuel calls for the FOMC to end its blindness to rising near-term inflation. With global growth expectations improving and the domestic economic recovery ahead of schedule (there was little to no reaction across currencies to last nights budget), inflation concerns are critical in shaping near term AUD direction.

Key Movers

Price action across currency markets was largely muted through trade on Tuesday as investors grapple with near-term inflation pressures and long-term expectations of economic recovery. The dollar, euro, yen and sterling offered little to incite excitement as markets appear content sitting on the sideline ahead of today’s all-important US CPI print. Input costs have risen sharply in recent months as increased commodity prices and rising labor costs have prompted an uptick across PPI and PMI indicators. While not the Fed’s preferred measure of inflation, analysts will be keenly attuned to understand how rising input costs are impacting end consumer prices. The Fed and its brethren of core central banks have been steadfast in their commitment to maintaining accommodative policy, looking through near-term price pressures. However, mounting inflation could drive hurried changes to monetary policy. Inflation concerns remain the key hurdle governing near-term direction across currency markets. Sustained pressure will weigh on the reflation narrative, hampering gains across traditional risk assets.

Expected Ranges

AUD/USD: 0.7730 - 0.7930 ▲

AUD/EUR: 0.6390 - 0.6490 ▼

GBP/NZD: 1.9280 - 1.9620 ▲

AUD/NZD: 1.0720 - 1.0830 ▲

AUD/CAD: 0.9450 - 0.9530 ▲

IMPORTANT: This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. Oz Forex Foreign Exchange makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites. Please read our Product Disclosure Statement and our Financial Services Guide.

Regulated in Australia by ASIC (AFS Licence number 226 484)
© 2010 Copyright Oz Forex Foreign Exchange Pty Ltd ABN 65 092-375-703
OzForex Foreign Exchange Services

Member of FOS (Financial Ombudsman Service)
Full Member of AFMA (Australian Financial Markets Association)

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD battles 1.21 after mixed US data

EUR/USD is trading above 1.21, choppy after US retail sales missed estimates with a drop of 1.3% but on top of upward revisions. Increases in producer prices accelerated last month.

EUR/USD News

GBP/USD bounces off two-month lows

GBP/USD has bounced off the fresh two-month low of 1.4034 but remains depressed. The delay in Britain's reopening is outweighing upbeat UK job figures. Tension is mounting ahead of the Fed.

GBP/USD News

XAU/USD looks to $1880 after recapturing $1858

Gold price is attempting a minor recovery above $1850, although the bulls appear to lack conviction, as the US dollar continues to hover near monthly highs.

Gold News

Bitcoin continues to range higher, but altcoins suffer

Bitcoin price has experienced a 32% upswing over the past six days and might retrace to gather more steam. Ethereum price performance is lackluster as it rallied roughly 17% in the same period as BTC.

Read more

Tesla still stuck in first gear

Tesla stock recovered last week as some investor enthusiasm finally returned to the stock with the release of the new Model S Plaid at Tesla's Freemont factory.

Read more

Majors

Cryptocurrencies

Signatures