Aussie Drops As Australia's Inflation Misses Expectations
27 July 2022 - 01:11PM
RTTF2
The Australian dollar fell against its major counterparts in the
Asian session on Wednesday, as the nation's inflation rose less
than expected in the second quarter.
Data from the Australian Bureau of Statistics showed that
Australia's consumer prices rose 6.1 percent in the second quarter,
compared to 5.1 percent in the first quarter. Inflation was
forecast to climb to 6.2 percent.
The data reduced expectations for a supersized 75 basis point
rate hike from the Reserve Bank of Australia when it meets next
week.
Economists now expect the RBA to raise the key rate by 50 basis
points to 1.85 percent in August.
Traders awaited the Federal Reserve's policy announcement due
later today, when it is expected to deliver another 75 basis point
hike.
The aussie was down against the greenback and the loonie,
touching 2-day lows of 0.6913 and 0.8901, respectively. The aussie
is likely to face support around 0.68 against the greenback and
0.87 against the loonie.
Reversing from its early highs of 1.4569 against the euro and
1.1140 against the kiwi, the aussie edged down to 1.4668 and
1.1094, respectively. The aussie is seen finding support around
1.48 against the euro and 1.09 against the kiwi.
The aussie pulled back from an early 5-day high of 95.32 against
the yen, dropping to 94.75. Next key support for the aussie is
likely seen around the 90.5 level.
Looking ahead, U.S. durable goods orders, advance goods trade
balance, wholesale inventories and pending home sales, all for
June, are due out in the New York session.
At 2:00 pm ET, the Fed announces its decision on interest rate.
Economists widely expect the Fed to raise rates by 75 basis points
to 2.5 percent from 1.75 percent.
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