AUD/USD kisses 0.7100 for the first time in five months as Australian Inflation soars


  • 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.

AUD/USD

Overview
Today last price 0.7102
Today Daily Change 0.0060
Today Daily Change % 0.85
Today daily open 0.7042
 
Trends
Daily SMA20 0.689
Daily SMA50 0.6792
Daily SMA100 0.6646
Daily SMA200 0.6816
 
Levels
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

 

 

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