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AUD/USD rallies above 0.7000 as inflation and activity data temper rate bets
AUD/USD rose 1.0% even after Australia’s trimmed-mean inflation came in at 3.6% year over year, while July and June activity indicators stayed firm.
The Australian dollar pushed higher on Thursday, trading above 0.7000 for much of the session after cutting through the 50-day EMA at 0.7000, a level the pair had been rejected at repeatedly since June, according to FXStreet.
FXStreet attributed the move partly to softer Australian inflation and stronger activity. Australia’s second-quarter trimmed-mean inflation, which the Reserve Bank of Australia targets, printed 3.6% year over year versus a May forecast of 3.8%, with the monthly headline rate easing to 3.8% from 4.0% as markets took the August rate hike further out of reach within the hour.
At the same time, the report’s activity data pointed in the opposite direction, with building permits jumping 7.2% month over month in June and July flash surveys remaining in expansion, with a composite reading of 52.6. FXStreet also cited a broader dollar move, noting that USD strength weakened after USD/JPY dropped sharply on suspected Japanese intervention.
In dollar terms, the Aussie gained about 1.1% versus the US dollar, while FXStreet said the pair’s broader funding dynamics deteriorated as the yen fell close to 2% on the day. FXStreet described that combination as a rare mix where the Aussie benefited most from gains against the dollar, despite weakness versus its main funding currency.
Latest closeUSD/JPY 159.74 ▼2.5%