Home AUD/USD recovers on OK inflation data

Australian inflation figures are A-OK in Q1. Prices rose by 0.2% q/q and 1.3%, as expected. When stripping out more volatile components such as oil and food, the Trimmed Mean CPI rose 0.6% q/q and 2.3%. The latter figure is a tick above 2.2% expected.

This was enough to relive AUD/NZD from  the danger of parity and to help AUD/USD advance and get closer to 0.78.

Also the Weighted Median inflation figure came out better than expected, with +0.6% q/q and 2.4% y/y. All  in all, the  numbers were either “as expected” or a tick above expectations.

Nevertheless, this was enough for the A$ to recover. Traders seem to have faded away the  bearish comments from RBA governor Stevens that were later followed by the heavy hints about cutting the rates in May.

The Reserve Bank of Australia would like a weaker exchange rate for the Aussie, but if inflation is as solid as it is and as house prices are still looking OK, markets aren’t convinced that a cut is indeed on the cards.

Here is how this recovery looks on the chart:

AUDUSD April 22 2015 technical chart recovering after CPI Australian dollar


Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.