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Australian inflation data for the second quarter of the year, which is due out on July 29 at 01:30 GMT, is expected to plunge to record levels at -2.0% from 0.3% in the previous quarter. The AUD/USD pair could challenge the year high at 0.7182 with better-than-anticipated data, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“According to preliminary estimates, Q2 CPI is seen at -2.0% from 0.3% in the previous quarter, and at -0.4% when compared to the second quarter of 2019 vs. the previous 2.2%. The Trimmed Mean CPI is expected at 0.1% QoQ and at 1.4 YoY.”

“Worse-than-anticipated numbers could take their toll on the Aussie, but a sustained decline is out of the picture for now. Instead, bulls can take their chances after the initial reaction to CPI figures. Upbeat numbers, on the other hand, can push the AUD/USD pair above the 0.7182 year-high, particularly considering the US dollar will likely remain weak ahead of Q2 GDP figures and the Fed Monetary Policy decision.”