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Australian dollar firms after hot CPI print as traders await US PCE
AUD/USD climbed to the 0.7170 area, supported by a softer trend in headline Australian inflation but a July rate above the market forecast.
The Australian dollar strengthened against the US dollar for a second straight day, with AUD/USD rising into the 0.7170 area after Australia’s latest consumer inflation release. FXStreet reports the Australian Bureau of Statistics said headline CPI increased 3.5% year over year in July, down from 3.8% in the prior month, but still above the 3.2% consensus estimate. The gap leaves room for the Reserve Bank of Australia to consider additional tightening, a factor traders see as supportive for the Aussie.
Meanwhile, the US dollar struggled to draw fresh demand as expectations for an immediate Federal Reserve rate hike have eased. FXStreet also cited softer US bond yields and hopes for US-Iran diplomacy, while noting investors may wait for the US Personal Consumption Expenditures (PCE) Price Index to get clearer direction on the Fed’s policy path.
On the technical side, the pair is holding above the 100-period simple moving average on the 4-hour chart near 0.7085, reinforcing a constructive short-term bias. FXStreet said support is seen around that level, where buyers are likely to defend the broader upswing.