Australian Dollar stumbles as hot Australian CPI runs into a firmer US Dollar

Australia's annual headline inflation eased to 3.5% but came in above the 3.2% forecast.
US headline PCE inflation stayed at 3.7%, above the 3.6% consensus, giving the US Dollar Index a modest lift.
Reports of an Oman-Iran deal concerning the Strait of Hormuz steadied risk sentiment.

Agustin Wazne FXStreet

AUD/USD is trading around 0.7170 on Wednesday, down slightly after a hot Australian inflation print ran straight into a firmer US Dollar.

Australia's monthly Consumer Price Index (CPI) climbed 1% in July, above the 0.8% forecast, lifting the annual rate to 3.5%. The trimmed mean measure of the Reserve Bank of Australia's (RBA) preferred core gauge rose 0.5% on the month and held at 3.6% YoY, above the 3.5% forecast.

The US Dollar found support of its own. Annual Personal Consumption Expenditure (PCE) inflation, the Federal Reserve's (Fed) preferred measure, held at 3.7%, above the 3.6% consensus, while the core PCE Price Index stayed at 3.3% as expected. Both rose 0.2% on the month.

Iran and Oman announced this week that they have completed their agreement over management of the Strait of Hormuz, but the US is not party to the agreement and has threatened Oman for making a separate deal that excludes it. A calmer Gulf would normally help risk-sensitive currencies like the Aussie.

Technical Analysis:

On the 4-hour chart, AUD/USD trades at 0.7171, holding a constructive bullish tone as it remains above both the 20-period Simple Moving Average (SMA) at 0.7164 and the longer-term 100-period SMA at 0.7090. The pair is testing a tight band of overhead supply just under recent highs, while the 14-period Relative Strength Index (RSI) around 60 stays in positive territory, hinting that upside momentum is still present but shy of overbought conditions.

On the topside, immediate resistance appears at the nearby horizontal barrier at 0.7175, followed by the recent cap around 0.7188. On the downside, initial support is clustered at 0.7168, reinforced by the 20-period SMA at 0.7164 and the horizontal level at 0.7160, before a deeper structural floor emerges at the 100-period SMA near 0.7090.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.