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Australian dollar rises as softer US inflation weighs on dollar
AUD/USD climbed near 0.6990, with US CPI easing to 3.5% year over year and the core annual rate falling to 2.6%.
The Australian dollar strengthened sharply against the US dollar on Tuesday, with AUD/USD trading near 0.6990 and edging toward the 0.7000 level as the greenback fell after weaker-than-expected US inflation data, according to FXStreet.
US Consumer Price Index inflation declined 0.4% month over month in June versus expectations for a 0.1% drop, and annual inflation slowed to 3.5% from 4.2%. Core CPI was unchanged on the month, while the annual underlying rate eased to 2.6% from 2.9%, undershooting forecasts.
FXStreet also pointed to signs of moderation in employment, noting the ADP Employment Change four-week average fell to 19.75K from 21K, which helped outweigh relatively hawkish remarks from Federal Reserve Chair Kevin Warsh during testimony before Congress.
Attention now shifts to China releases that could influence AUD given the country’s close trade relationship with China, with second-quarter GDP expected to grow 4.5% year over year and June retail sales also in focus.