- Strong US CPI figures have sent the Australian Dollar down.
- The US CPI accelerated 0.4% in March, compared to expectations of 0.3%. Annual inflation jumps to 3.5% from 3.2% the previous month
- AUD/USD is under pressure again, with 0.6480 and 0.6445 support levels in bears' sights
The Australian Dollar recorded a sharp reversal on Wednesday. Higher-than-expected inflation levels in the US have endorsed the Fed's “higher for longer” stance, crushing risk assets such as the Australian dollar.
Consumer inflation accelerated in the US in March, with an overall rise of 0.4%, compared to expectations of 0.3%. In year-on-year terms, consumer prices rose 3.5%, compared to 3.2% in February. Core inflation accelerated to 0.4% from 0.3% the previous month, while the annual rate remained stable at 3.8%.
These levels confirm that the Fed still has work to do to push inflation towards its 2% target, and all but scuttle the markets' view of three rate cuts in 2024 starting in June.
Later today, the Fed's monetary policy minutes will be analyzed from another perspective after the CPI data. On Friday, the PPI will provide more information on the inflation outlook, although the Fed's Bostic and Williams, both on the committee's hawkish side, could attract investors' attention.
The technical picture looks increasingly bearish as the pair is on track to register a strong negative candle today. The 0.6480-0.6500 area could serve as support for the pair before the major bearish target, 0.6445. Resistances are located at 0.6550 and 0.6635.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
