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Australian Dollar slips as investors weigh CPI and the Fed decision

AUD/USD fell to about 0.6990, after risk sentiment improved when oil dropped more than 7% and lifted global stocks and bonds.

Reported · Written up by our desk · Major Pairs

The Australian dollar weakened on Monday, with AUD/USD retreating to around 0.6990 after an earlier Asian-session rise to 0.7011. The move came as traders looked ahead to Australia’s consumer price index release and the Federal Reserve’s upcoming interest-rate decision.

FXStreet said a pause in US-Iran hostilities helped push oil lower, with West Texas Intermediate crude trading near $83.70 per barrel and down more than 7%. The oil decline eased concerns about additional inflation pressure from energy costs and slightly reduced expectations for an immediate Fed rate increase, supporting risk-sensitive currencies such as the Aussie.

Looking ahead, investors will monitor a speech from Reserve Bank of Australia Governor Michele Bullock on Tuesday for clues on inflation and the future path of rates. In the US, the ADP Employment Change four-week average is scheduled to be released, with a stronger result potentially supporting the US dollar, while a weaker reading may reinforce signals that employment growth is moderating.

Attention then turns to Australia’s June CPI on Wednesday, with prior data showing headline CPI down 0.7% month over month and annual inflation at 4.0%. The Fed will also announce its decision later on Wednesday after its July 28 to 29 meeting, with its target range kept at 3.5% to 3.75% since the start of the year, and follow-through from US PCE inflation later in the week.

Latest closeWTI crude $91.10 ▲3.2%

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