The Australian dollar remains under pressure. AUD/USD is trading at 0.7468, close to the session lows. It is down from a high of 0.7565, nearly 100 pips.
The fall comes despite OK inflation numbers. The Consumer Price Index advanced by 0.4%, as expected. This is a bounce back from -0.2% seen beforehand. In addition, the Trimmed Mean CPI (aka Core CPI) came out better than expected at 0.5% instead of 0.4%.
Shouldn’t this be good news? Higher inflation implies no rush for cutting rates. The recent meeting minutes released by the RBA have shown an openness to slash the cost of lending in the upcoming meeting. Well, perhaps it will not come so fast.
But things look different in currency markets. AUD/USD did spike higher but fell back down quite swiftly. The global mood seems to remain cautious. The Federal Reserve makes its decision later today and the dollar looks relatively solid ahead of the decision.
More: 3 Reasons To Stay Bearish AUD Ahead Of Inflation Data – Deutsche Bank
Here is how the spike and the following downfall look on the chart:
