AUD Performance in Early Trading
The Australian dollar (AUD) has been doing quite well, noted for being 0.1% higher against the US dollar (USD) at around 0.7065 during early European trading on Tuesday. This rise in value comes in anticipation of the Consumer Price Index (CPI) data that is set to be released on Wednesday.
Investors seem eager to see what Australia’s inflation data reveals, hoping for insights regarding the Reserve Bank of Australia’s (RBA) future monetary policy decisions. Earlier this month, the RBA indicated the possibility of further interest rate hikes. They had already raised the official cash rate (OCR) by 25 basis points (bp) to 3.85%, largely due to growing inflation concerns.
One RBA representative remarked, “Inflation is too strong. We cannot allow inflation to slip away from us again” following the rate announcement.
The Australian Bureau of Statistics is expected to report a 3.7% annualized growth in CPI on Wednesday, a slight decrease from the 3.8% recorded in December. Additionally, the trimmed average CPI is projected to rise by 3.3% in that same timeframe.
Interestingly, the Australian dollar has seen support against the USD, which itself remains steady against other currencies despite President Trump’s threats of new tariffs.
At the moment, the US dollar index (DXY), which gauges the USD’s strength against six major currencies, stood at around 97.80, increasing by 0.12%.
On another note, President Trump recently hinted at raising penalties on nations “toying with existing trade agreements” in light of a Supreme Court decision.
Upcoming Economic Indicators
One notable event soon is the release of the Consumer Price Index (YoY), which is compiled by the Australian Bureau of Statistics. This index tracks monthly price changes for a wide range of goods and services that consumers typically purchase. The YoY measure contrasts the pricing of a given month with that of the same month from the previous year. Higher figures typically bolster the Australian dollar, whereas lower figures tend to weigh it down.
