- AUD/USD came under strong bearish pressure in the early American session.
- US Dollar Index posts strong gains above 90.50.
- Annual CPI inflation in US jumped to 4.2% in April.
The AUD/USD pair lost nearly 50 pips in a matter of minutes after the highly-anticipated inflation data from the US. As of writing, the pair was losing nearly 1% on a daily basis at 0.7765.
Strong CPI figures lift USD
The US Bureau of Labor Statistics announced on Wednesday that the Consumer Price Index (CPI) jumped to 4.2% on a yearly basis in April from 2.6% in March. This reading beat the market expectation of 3.6% by a wide margin and provided a boost to the greenback. Additionally, the Core CPI rose to 3% from 1.6%.
At the moment, the US Dollar Index is up 0.45% on the day at 90.57. In the meantime, the inflation data seems to be weighing heavily on market sentiment with S&P 500 Futures losing 0.75%. A steep decline in Wall Street's main indexes after the opening bell could help the USD preserve its strength and force AUD/USD to extend its slide.
Later in the session, Federal Reserve's Vice Chairman Richard Clarida will be delivering a speech. On Thursday, Consumer İnflation Expectations data will be featured in the Australian economic docket.
Technical levels to watch for
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