AUD/USD falls sharply toward 0.7750 after US inflation data
- 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
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
