Australian Dollar bulls seem hesitant on mixed CPI data; hangs near April lows vs USD

AUD/USD edges higher following the release of Australian consumer inflation figures for May.
Bulls, however, seem hesitant amid expectations that the RBA will hold interest rates steady.
The USD climbs to an over one-year high on hawkish Fed expectations and further caps the pair.

Haresh Menghani FXStreet

The AUD/USD pair attracts some buyers following the release of softer Australian consumer inflation figures during the Asian session on Wednesday and reverses a part of the previous day's slump to the 0.6900 mark, or its lowest level since early April. Spot prices currently trade around the 0.6920-0.6925 region, though any meaningful recovery seems elusive amid a bullish US Dollar (USD).

The Australian Bureau of Statistics (ABS) reported that the headline Consumer Price Index (CPI) unexpectedly eased from 4.2% YoY to 4% in May. Adding to this, the monthly CPI fell more-than-expected, by 0.7% during the reported month, following a 0.4% growth recorded in April. The softer readings, however, were offset by the Trimmed Mean CPI, which rose 0.4% on a monthly basis and picked up slightly from the 3.4% to the 3.6% YoY rate in May.

The initial market reaction, however, turns out to be muted as the US-Iran peace deal has eased concerns about the energy shock, endorsing the view that the Reserve Bank of Australia (RBA) will hold rates steady in the coming months. This, in turn, holds back traders from placing aggressive bullish bets around the Australian Dollar (USD). Apart from this, the prevalent USD buying interest further contributes to capping the upside for the AUD/USD pair.

The USD Index (DXY) has advanced to a fresh high since May 2025 amid expectations for a rate hike by the US Federal Reserve (Fed). In fact, traders upped their bets that the US central bank will raise borrowing costs by at least 25-basis-points (bps) by the year-end following the Fed's surprisingly hawkish turn last week. This offsets the optimism over the US-Iran peace deal and might continue to underpin the USD, warranting caution for AUD/USD bulls.

Economic Indicator

Trimmed Mean CPI (YoY)

The Trimmed Mean Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a monthly basis, is a measure of underlying inflation. The Trimmed mean is calculated using a weighted average of percentage change from the middle 70% of the distribution of all CPI components in order to smooth the data from the more-volatile items. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold pares intraday losses; down a little below $4,100 as focus remains on US NFP

Gold recovers most of its early intraday losses, trading with a mild negative bias near $4,070-$4,075. The US Dollar extends Thursday's recovery from its lowest level since late September, exerting some downward pressure on the commodity. Furthermore, a hawkish US Federal Reserve contributes to the precious metal pullback from a two-week high, which it touched the previous day. Bearish traders, however, seem hesitant ahead of the release of US monthly employment details, which should provide a fresh impetus to the precious metal.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

US Nonfarm Payrolls expected to pick up in October

The United States Bureau of Labor Statistics is set to release October Nonfarm Payrolls data on Friday at 13:30 GMT. The report is expected to show an increase of 65K jobs, up from 29K in the previous month.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.