The strength of the US Dollar has pushed the AUD/USD pair to its lowest level in almost a year. After reaching the 0.6330 area, it started a bounce. H
Australian inflation aligns with expectations; focus shifts to upcoming Retail Sales data.The strength of the US Dollar has pushedto its lowest level in almost a year. After reaching the 0.6330 area, it started a bounce. However, the bias remains tilted to the downside, and only a correction in the US Dollar could provide some relief.
In Australia, the Monthly Consumer Price Index showed an increase in the annual rate to 5.2%, the first acceleration since April. With the CPI well above the 2-3% target range, the Reserve Bank of Australia is likely to maintain a hawkish stance. However, the market still expects the RBA to hold rates steady at the October 3 meeting. However, expectations for another rate hike by Q1 of next year are above 50%.
On Thursday, Australia will release August Retail Sales, which are expected to rise by 0.3% following a 0.5% increase in July. However, the economic figures are likely to be overshadowed by current market developments. If Wall Street's decline continues and impact Asian markets, the Australian Dollar will likely continue to face pressure.
The US Dollar extended its rally on Wednesday, driven by risk aversion and supported by positive US economic data. Durable Goods Orders rose 0.2% in August, surpassing expectations for a 0.5% decline. More data, including the weekly Jobless Claims, is due on Thursday.The AUD/USD broke below 0.6350 and accelerated its decline towards the 0.6330 area, which has now become a key support level to consider before reaching the 0.6300 area.
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