Australian Dollar weakens to near 0.7200 as traders await US PPI inflation data
The AUD/USD pair declines to near 0.7215 during the early Asian trading hours on Thursday. Markets turn cautious as traders brace for the release of the US inflation data later this week.
The Australian Dollar (AUD) experienced a decline to nearly 0.7215 during early Asian trading hours on Thursday, as traders awaited the release of US Producer Price Index (PPI) inflation data and Consumer Price Index (CPI) data on Friday. Rising tensions in the Middle East and expectations of an interest rate hike by the Federal Reserve (Fed) also weighed on riskier currencies, including the AUD.
The market currently prices in a 60% chance of an interest rate hike at the Fed's upcoming policy meeting, according to the CME FedWatch Tool. Analysts at Rabobank noted that the Reserve Bank of Australia (RBA) has become more hawkish, potentially raising interest rates again if inflation persists. A more restrictive RBA stance could support the AUD, particularly beyond the housing sector.
Technical analysis suggests the AUD/USD pair is supported above the 20-day simple moving average and the 100-day simple moving average, with the currency hovering near the upper half of the Bollinger envelope.
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