- AUD/USD has encountered the 0.7100 resistance amid sky-rocketing Australian inflation.
- The RBA may find an interest rate peak at 3.60% by June in CY2023.
- Weaker US yields are weighing on the US Dollar as the Fed is expected to announce a smaller rate hike ahead.
The AUD/USD pair has touched the round-level resistance of 0.7100 for the first time in the past five months amid fresh highs in the Australian inflation rate at 7.8% on an annual basis for the fourth quarter of CY2022. The annual CPI has been released stronger than the expectations of 7.5% and the prior release of 7.3%. On a quarterly basis, the inflation rate has climbed to 1.9% vs. the consensus of 1.6% and the former release of 1.8%.
There is no denying the fact that a stronger-than-projected Australian inflation rate is going to compel the Reserve Bank of Australia (RBA) for hiking interest rates further in its February monetary policy meeting. An Australian Financial Review survey of 34 economists conveys that RBA Governor Philip Lowe to continue hiking interest rates further to 3.60%. The RBA is expected to hike its Official Cash Rate (OCR) by 25 basis points (bps) in February and June. Also, one of the outcomes of the survey is that the first post-pandemic-era rate cut will be in play by March 2024.
Earlier this week, Australian Treasurer Jim Chalmers cited that the worst part of the country's inflation crisis was over. He believes "The Australian economy will begin to soften a bit this year and that is the inevitable likely consequence of higher interest rates and a slowing global economy.” Fresh highs in the inflation rate indicate that the interest rate peak has not been found and the worst is not over yet.
Meanwhile, S&P500 futures have witnessed a marginal recovery after falling sharply in early Asia. Amid the absence of recovery signs in the 500-US stock basket futures, risk-perceived assets are still at risk and investors might avoid them further. The US Dollar Index (DXY) is struggling in sustaining above the immediate resistance of 101.50, weighed down by weaker yields. Also, the rising chances of a smaller interest rate hike by the Federal Reserve (Fed) in its February monetary policy is impacting the US Dollar.
|Today last price||0.7102|
|Today Daily Change||0.0060|
|Today Daily Change %||0.85|
|Today daily open||0.7042|
|Previous Daily High||0.7058|
|Previous Daily Low||0.6993|
|Previous Weekly High||0.7064|
|Previous Weekly Low||0.6872|
|Previous Monthly High||0.6893|
|Previous Monthly Low||0.6629|
|Daily Fibonacci 38.2%||0.7033|
|Daily Fibonacci 61.8%||0.7018|
|Daily Pivot Point S1||0.7005|
|Daily Pivot Point S2||0.6967|
|Daily Pivot Point S3||0.694|
|Daily Pivot Point R1||0.7069|
|Daily Pivot Point R2||0.7096|
|Daily Pivot Point R3||0.7134|
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.