AUD/USD ignores Australia Consumer Inflation Expectations near 0.6280, US CPI eyed

AUD/USD treads water around 0.6280, despite refreshing the intraday high, as traders await the key US inflation data during early Thursday. In doing so, the Aussie pair ignores recently downbeat data from home, as well as hawkish Fedspeak.

Australia’s Consumer Inflation Expectations for October reprint 5.4% figures versus the market forecasts supporting 5.8% level.

On the same line were the latest hawkish comments from Federal Reserve Governor Michelle Bowman who said that if high inflation does not start to wane she will continue to support aggressive rate rises aimed at taming price pressures, reported Reuters.

Also likely to challenge the AUD/USD buyer is the CME’s FedWatch Tool which takes clues from the hawkish bias at the US central bank, as per the latest Fed Minutes, as it portrays a nearly 85% chance of the Fed’s 75 bps rate hike in November.

Additionally, fears surrounding the fresh covid-led lockdowns from China and increasing virus numbers from Europe should have also weighed on the risk barometer pair.

It should be noted that the Chinese media chatters suggesting the government’s plan to buy houses as a part of the stimulus seemed to have put an immediate floor under the AUD/USD prices.

Amid these plays, the benchmark US 10-year Treasury yields remain sidelined around 3.90%, pausing the two-day downtrend, whereas the S&P 500 Futures print mild gains.

Looking forward, the US Consumer Price Index (CPI) data for September, expected to ease to 8.1% YoY versus 8.3% prior, may challenge the AUD/USD sellers considering the US dollar’s lackluster moves and the market’s resistance to respect the inflation data.

Also read: US September CPI Preview: Monthly core inflation is the figure to watch

Technical analysis

Although a five-week-old bearish channel is likely to restrict the AUD/USD pair’s moves between 0.6160 and 0.6430, an oversold RSI (14) signals limited downside room.