Australian Dollar slips as US Dollar steadies post CPI
AUD/USD is trading near the 0.7070 zone, holding onto a minority of Wednesday's gains after the pair touched a session high near 0.7090.
The Australian Dollar (AUD) slipped against the US Dollar (USD) as the latter steadied, following the release of the US Consumer Price Index (CPI). The CPI figures came in largely as expected, with headline inflation increasing by 0.1% month-over-month and 3.4% year-over-year, aligning with forecasts. Core annual inflation, however, was below expectations at 2.5%, slightly lower than the 2.6% consensus.
This data initially caused the US Dollar to weaken, dampening expectations of an imminent rate hike. Analysts predict Thursday's test of the US Producer Price Index (PPI) may further reinforce the disinflation narrative following Wednesday's CPI release. TD Securities maintains that the Federal Reserve is likely to keep its policy stance unchanged for the rest of the year, citing normalization in services prices and controlled tariff pass-through.
Meanwhile, AUD/USD traded at 0.7067, maintaining support above key moving averages and a tight range of overhead supply. The upcoming PPI report could refine near-term policy path expectations.
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