Australian dollar hits 9-week low, rounds out a rough month
SYDNEY: The Australian dollar slipped to a nine-week low on Wednesday as inflation data came in just under forecasts and led markets to lengthen the odds on another rate hike, at least in the near term. The miss was marginal but gave speculators an excuse to keep selling the currency after three straight weeks of falls. The Aussie eased 0.3% to $0.6963, bringing its losses this month to 2.8%. The…
Sydney, Australia witnessed the Australian dollar reaching its lowest point in nine weeks on Wednesday, as inflation data fell short of expectations and prompted markets to lower the odds of another rate hike in the near future. Despite a marginal miss, the currency experienced a 0.3% depreciation to $0.6963, marking a 2.8% decline this month.
Support levels are pegged at $0.6922 and $0.6866. The Consumer Price Index (CPI) for August rose 0.4%, below the forecasted 0.5%, while core inflation increased 0.2% to 3.6%, also below expectations of 0.3%. These figures indicate annual inflation rates well above the Reserve Bank of Australia's target range of 2% to 3%. Consequently, the probability of a November rate hike fell to 20% from 36% prior to the data release.
APAC economist Abhijit Surya of Capital Economics predicts the Reserve Bank of Australia will maintain a cautious stance, awaiting confirmation of disinflationary trends. The data provided a breather for struggling bond markets, with 3-year debt futures rising 8 ticks to 95.100, and 10-year debt yields decreasing 5 basis points to 5.329%.
The New Zealand dollar, meanwhile, remained stable at $0.5640 after a 0.5% drop on Tuesday, hitting its yearly low of $0.56265. Support for this currency is now forecast at $0.5580 and $0.5512. The month has been particularly challenging for the New Zealand dollar, with a 4.7% decline, largely due to the Reserve Bank of New Zealand's inflation projections falling short of market expectations.
The central bank has since expressed growing concerns over inflation, resulting in a 70% chance of another rate hike in October.
Written by urgent.news from Business Recorder's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
