When is Australia inflation data and how could it affect AUD/USD?

Overview

Australia’s Monthly Consumer Price Index (CPI) for April, scheduled for publishing on early Wednesday around 01:30 GMT, appears the crucial data for the AUD/USD pair traders to watch.

The reason could be linked to the Reserve Bank of Australia (RBA) Governor Philip Lowe’s hawkish comments and the Aussie central bank’s recent hawkish surprise.

It’s worth noting that Analysts at ANZ expect 6.4% YoY print of the Aussie inflation data, suggesting more inflation pressure and a favor to the Aussie bulls.

Apart from that, China’s official PMIs for May also get out at 01:30 AM GMT on Wednesday and increases the importance of the economic calendar around that time. It should be noted that the headline NBS Manufacturing PMI is expected to improve to 49.4 from 49.2 previous readings. but Non-Manufacturing PMI may ease to 50.7 from 56.4 prior.

Ahead of the release, FXStreet’s Matias Salord says

Australia will release the May monthly Consumer Price Index (CPI), expected to show a modest increase from the 6.3% of the previous. These numbers will be critical for monetary policy expectations. However, it would take a large positive surprise to boost expectations for a rate hike. As of now, markets expect a pause in June.

How could AUD/USD react to the news?

AUD/USD remains indecisive around 0.6515 amid a sluggish session heading into the key Aussie data, after snapping a two-day recovery the previous day.

In doing so, the Aussie pair also seems to prepare for a negative surprise from the Aussie data, as well as portray the market’s anxiety ahead of other key data/events including China PMI, US Senate voting on the debt ceiling deal and the JOLTS Jobs Openings.

As a result, upbeat data may only provide a knee-jerk reaction to the AUD/USD prices while defending the overall bearish trend unless marking a heavy positive surprise, which is less expected.

Technically, the AUD/USD pair’s rebound remains elusive unless crossing a three-week-old descending resistance line, around 0.6560 by the press time.

Key notes

AUD/USD grinds above 0.6500 on hawkish RBA’s Lowe ahead of China PMI, Aussie inflation 

AUD/USD Forecast: Aussie under pressure ahead of Lowe and inflation data

About Aussie Consumer Price Index

The quarterly Consumer Price Index (CPI) published by the Australian Bureau of Statistics (ABS) has a significant impact on the market and the AUD valuation. The gauge is closely watched by the Reserve Bank of Australia (RBA), in order to achieve its inflation mandate, which has major monetary policy implications. Rising consumer prices tend to be AUD bullish, as the RBA could hike interest rates to maintain its inflation target. The data is released nearly 25 days after the quarter ends.