- When is Australia inflation data and how could it affect AUD/USD?
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When is Australia inflation data and how could it affect AUD/USD?
Overview
Australia’s first quarter (Q1) and Monthly Consumer Price Index (CPI) for March, scheduled for publishing on early Wednesday around 00:30 GMT, appear the crucial data for the AUD/USD pair traders to watch. The reason could be linked to the Reserve Bank of Australia’s (RBA) recent pause in the rate hike trajectory.
Forecasts suggest that the Monthly CPI is expected to ease to 6.6% YoY versus 6.8% prior, confirming policymakers’ latest claims of easing inflation pressure due to higher rates. On the same line, the Q1 CPI is likely to ease to 1.3% QoQ from 1.9% in previous readings.
However, the RBA Trimmed Mean CPI is likely to increase to 7.2% YoY during the first quarter, versus 6.9% prior, which in turn can surprise the markets and the AUD/USD pair traders.
Ahead of the release, Analysts at the ANZ said,
We’re expecting headline CPI inflation to fall sharply to 6.9% from a peak of 7.8% in Q4, although we expect the trimmed mean measure will prove sticky, declining only marginally to 6.8% from 6.9%. With the market undecided on whether or not the RBA will hike again, these data will be closely watched. We are forecasting a final 25bp hike from the RBA in August.
How could AUD/USD react to the news?
AUD/USD prints mild gains around 0.6635 as it consolidates the previous day’s heavy losses, the biggest in eight days, amid a sluggish session heading into the key Aussie data.
In doing so, the Aussie pair also seems to prepare for a negative surprise from the Aussie data.
As a result, upbeat data may only provide a knee-jerk reaction to the AUD/USD prices while defending the overall bearish trend unless marking a heavy positive surprise, which is less expected.
Technically, the AUD/USD pair’s sustained downside break of a 1.5-month-old support line, now immediate resistance near 0.6655, joins bearish MACD signals to keep the Aussie pair sellers hopeful.
Key notes
AUD/USD Price Analysis: Corrective bounce seeks acceptance from 0.6655 hurdle and Australia inflation
AUD/USD defends 0.6600 ahead of Australian Inflation and US Durable Goods Orders data
AUD/USD Forecast: Aussie tumbles on risk aversion, likely to challenge 0.6600
About Aussie Consumer Price Index
The quarterly Consumer Price Index (CPI) published by the Australian Bureau of Statistics (ABS) has a significant impact on the market and the AUD valuation. The gauge is closely watched by the Reserve Bank of Australia (RBA), in order to achieve its inflation mandate, which has major monetary policy implications. Rising consumer prices tend to be AUD bullish, as the RBA could hike interest rates to maintain its inflation target. The data is released nearly 25 days after the quarter ends.
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