Home›Forex›Major Pairs›Australian dollar extends decline as softer inflation…

Australian dollar extends decline as softer inflation data weighs

AUD/USD fell 0.4% to around 0.6945, while Australia’s June CPI and trimmed-mean inflation both came in below expectations.

Reported · Written up by our desk · Major Pairs

The Australian dollar extended its recent slide, with AUD/USD trading 0.4% lower near the 0.6945 area on Wednesday. FXStreet attributed the move to weaker-than-expected Australian inflation data that reduced support for the currency.

Australia’s consumer price index declined 0.1% month over month in June, versus expectations for a 0.2% increase. Annual inflation eased to 3.8% from 4.0%, and the trimmed mean CPI, the Reserve Bank of Australia’s preferred underlying measure, rose 0.3% month over month, below the prior 0.4% read.

Underpinning investors’ focus, the trimmed mean annual rate stayed unchanged at 3.6%. Attention is now on the Federal Reserve’s monetary policy announcement later on Wednesday, where the fed funds rate is widely expected to remain within the 3.50% to 3.75% range, though markets are pricing about a one-in-three chance of a 25 basis point increase.

FXStreet also pointed to geopolitical developments in the Gulf that have helped push crude prices higher, adding uncertainty around potential energy-driven inflation. The risk backdrop supported demand for the US dollar, helping weigh on AUD/USD ahead of the Fed decision.

Latest closeWTI crude $91.10 ▲3.2%

More like this

Sources