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AUD/USD leaning lower despite OK CPI

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:

AUDUSD July 27 low despite good inflation

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.