- The Aussie drops nearly 25-pips as the retreat extends on mixed China’s inflation.
- RBA’s warning on excessive lending risks adds to the weight on AUD/USD.
- US dollar holds the lower ground amid dovish Powell, ahead of US PPI data.
AUD/USD is trading under pressure below 0.7650, having turned south from daily highs of 0.7661 on mixed Chinese inflation figures and a cautious tone seen in the RBA’s Financial Stability Report (FSR).
The annualized Chinese Consumer Price Index (CPI) and Producers Price Index (PPI) outpaced expectations. However, the monthly CPI came in below forecasts at -0.5% in March, showing that the post-pandemic recovery in domestic consumption has still not picked up pace.
At the time of writing, the aussie trades 0.12% lower at 0.7641, having hit fresh daily lows at 0.7637 in the last minutes.
The rebound in the US dollar alongside the Treasury yields seems to add to the weight on the aussie dollar. The US dollar index is attempting a bounce around 92.10 while the 10-year US rates recover to 1.63%.
The sell-off in the US yields sent the dollar under the bus after Fed Chair Jerome Powell reiterated the dovish outlook on the monetary policy while downplaying the inflation risks.
Meanwhile, the RBA warned of excessive lending risks amid a surge in house prices in its latest Financial Stability Review (FSR), unnerving the optimists.
However, the mild gains in the S&P 500 futures and the rally in oil prices are offering support to the Aussie bulls. Next of note for the major remains the US PPI data release, as the dynamics in the dollar and yields could likely remain the main market motor.
AUD/USD: Technical levels to consider
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.