When is the Aussie CPI data and how could it affect AUD/USD?


Early Wednesday in Asia, at 00:30 GMT elsewhere, the Australian Bureau of Statistics (ABS) will roll out the fourth quarter (Q4) inflation numbers for Australia. The releases will include the headline Consumer Price Index (CPI) the Reserve Bank of Australia’s (RBA) Trimmed Mean CPI.

Despite recently released upbeat employment data, Tuesday’s Aussie numbers keep the odds of further weakness in Australian economics high, which in turn support the RBA’s easy money policy. That said, the CPI is likely recovering from 0.5% prior to 0.6% on the QoQ basis while expected to remain unchanged at 1.7% on YoY format. Further, RBA Trimmed Mean CPI could remain static at 0.4% on a quarterly basis but might step back to 1.5% from 1.6% on YoY, as per the forecasts.

TD Securities seems to consider today’s data as a non-event as their analysts said:

We don't expect the CPI outcome will influence the RBA's Feb rate decision. The RBA forecasts headline to come in at 0.7%, placing an annual headline at 1.9%. Driving the Q4 outcome is higher tobacco, petrol and food prices, accounting for ~half of the quarterly rise. The MI inflation gauge suggests the core should remain subdued. We pencil in +0.4% q/q, +1.5% y/y as per the RBA f/c.

Westpac highlights the odds of RBA’s easy money policy:

Australia’s Q4 CPI report is again expected to show a weak underlying inflation trend, the trimmed mean core CPI to print at 0.4%, 1.5% yearly. Auto fuel and tobacco will boost headline inflation in the quarter (WBC and market are at 0.6%), but annual headline inflation will remain below the RBA’s 2-3% yearly target range, circa 1.8% YoY.

How could it affect AUD/USD?

Considering the recent shift in the market’s risk sentiment, mainly due to the positive headlines from China, any upbeat reading can help buyers ahead of today’s Federal Reserve meeting. If the price pressure keeps being soft, odds concerning the RBA moving closer to negative rates increase, which in turn will pull AUD/USD below its multi-week low.

Technically, a confluence of 100-day SMA and an upward sloping trend line since October, the previous support, around 0.6840 now, become the key to watch as a break of which could call buyers targeting 0.6900 mark. On the contrary, 0.6700 and October 2019 low near 0.6670 are on the bears’ radar during further declines.

Key Notes

AUD/USD recovers from multi-week low to 0.6760 ahead of Aussie Q4 CPI

AUD/USD Forecast: Bearish ahead of Australian quarterly inflation data

About the Australia Consumer Price Index (CPI)

The Consumer Price Index released by the RBA and republished by the Australian Bureau of Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of AUD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or Bearish).

About the Australia RBA Trimmed Mean CPI

The Consumer Price Index released by the RBA and republished by the Australian Bureau of Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The trimmed mean is calculated as the weighted mean of the central 70% of the quarterly price change distribution of all CPI components, with the annual rates based on compounded quarterly calculations.

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD trades above 34-month lows after US retail sales miss

EUR/USD is trading around 1.0850, above the lowest since April 2017. The US Control Group disappointed by staying flat in January. Consumer sentiment beat expectations. Germany reported a 0% growth in Q4 2019. 

EUR/USD News

GBP/USD ticks down after reshuffle-related rally

GBP/USD is trading closer to 1.30, consolidating its gains after UK PM Johnson nominated Sunak as Chancellor instead of Javid, potentially directing fiscal stimulus. Brexit concerns and coronavirus developments are in play.

GBP/USD News

US retail sales modestly higher in January, soft in the details

Consumers kept to their habits boosting purchases last month but the holiday season was slower than its initial reading giving the New Year a soft beginning.

Read more

WTI climbs to fresh two-week highs above $52

The barrel of West Texas Intermediate (WTI) fell below the $51 handle on Thursday but recovered a large portion of its losses to close the day at $51.50 on easing concerns over the impact of the coronavirus outbreak on the global energy demand. 

Oil News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex MAJORS

Cryptocurrencies

Signatures