AUD/USD stable in 0.7140 area as hot CPI numbers shield Aussie from equity market losses


  • AUD/USD is stable in the 0.7140 area on Tuesday after Monday’s brief dip below 0.7100.
  • Hotter than expected Australian CPI data is helping shield AUD from further risk appetite-related losses as US equities slide.

After coming within a whisker of hitting the December 20 lows just above 0.7080 on Monday but then subsequently recovering back to the 0.7150 area as Wall Street recovered, AUD/USD has remained resilient and trades flat near 0.7140 on Tuesday. That despite sentiment in US equity markets taking a turn for the worse again, which weighed on the pair this time on Monday. Stronger than expected headline US Consumer Confidence figures for January have also not been able to weigh substantially on the pair that has held in the 0.7120-0.7160ish ranges for most of Tuesday’s session thus far.

The Aussie is finding support following a hotter than expected Q4 2021 Consumer Price Inflation report out of Australia that showed the headline rate rising from 3.0% in Q3 to 3.5% versus forecasts for a rise to 3.2%. Importantly, the RBA’s Trimmed Mean measure of inflation rose to 2.6% from 2.1%, much larger than the expected jump to 2.4%, putting core inflationary pressures back above the midpoint of the RBA’s 2-3% target range two years earlier than the central bank forecast. The data helped to stoke RBA tightening bets, thus helping to underpin the Aussie and shield it from the risk appetite-related downside being seen in its antipodean counterpart NZD on Tuesday.

Despite current RBA guidance that there will be no rate hikes until late-2023/2024, money market futures are now nearly pricing a 15bps rate hike in full by May. “Next week the RBA will likely end its QE and bring forward the timing it expects to begin raising rates from late-2023/2024 (according to its current forecasts) to firmly into 2023” noted analysts at Credit Agricole. “At this stage, the RBA is unlikely to give up its forecast of no rate hikes in 2022 until it sees wages data in February” the analysts added.

If the RBA’s meeting next week underwhelms market expectations for a hawkish shift and a signal for rate hikes in 2022, that suggests downside risks for AUD/USD, a cross already hampered recently by deteriorating risk appetite and a strengthening dollar. Bears will be looking for a more sustained break below 0.7100 in the coming days/weeks which would open the door to a move towards December lows at 0.7000.

AUD/Usd

Overview
Today last price 0.7138
Today Daily Change -0.0003
Today Daily Change % -0.04
Today daily open 0.7141
 
Trends
Daily SMA20 0.7215
Daily SMA50 0.7188
Daily SMA100 0.7275
Daily SMA200 0.741
 
Levels
Previous Daily High 0.7188
Previous Daily Low 0.709
Previous Weekly High 0.7277
Previous Weekly Low 0.7169
Previous Monthly High 0.7278
Previous Monthly Low 0.6993
Daily Fibonacci 38.2% 0.7127
Daily Fibonacci 61.8% 0.715
Daily Pivot Point S1 0.7091
Daily Pivot Point S2 0.7041
Daily Pivot Point S3 0.6993
Daily Pivot Point R1 0.719
Daily Pivot Point R2 0.7238
Daily Pivot Point R3 0.7288

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD: Bulls firming to test critical 0.71 the figure that guards a much stronger correction

AUD/USD: Bulls firming to test critical 0.71 the figure that guards a much stronger correction

There is a battle going on between the bulls and bears surrounding the Aussie and the US dollar. Bulls are testing the neckline near the current levels at 0.71 the figure. A break here will leave the bulls in good stead for a break of resistance around 0.7135.

AUD/USD News

EUR/USD: Bulls jostle with nearby resistance with eyes on 1.0770

EUR/USD: Bulls jostle with nearby resistance with eyes on 1.0770

EUR/USD pares intraday gains around 1.0700 while stepping back from an immediate resistance line. The major currency pair reverses the previous day’s pullback from the monthly high during Thursday’s Asian session.

EUR/USD News

Gold defends bounce off weekly support near $1,850 ahead of US GDP

Gold defends bounce off weekly support near $1,850 ahead of US GDP

Gold  treads water around $1,855, defending the previous day’s corrective pullback from a one-week-old support line during Thursday’s Asian session as sluggish markets and a lack of major data/events seem to restrict the metal’s immediate moves.

Gold News

What needs to happen for Axie Infinity price to recover

What needs to happen for Axie Infinity price to recover

Axie Infinity price displays reasons to believe in further momentum to the upside. Traders should approach the digital asset with relative caution, looking for one more fake-out before the rally occurs. Axie Infinity price appears to be unfolding as an extended impulse wave down.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures