- AUD/USD stalls its rally as USD regains strength amid cautious markets.
- S&P 500 futures erase early gains to fall 0.25% so far.
- Attention turns to Wednesday’s Australian inflation data for further clues on the RBA.
The AUD/USD is trading around 0.7200after halting its recovery momentum at the start of the European session.
The latest move lower in the Australian dollar was supported by the resurgent demand for the US dollaras markets turned cautious, reflecting the 0.25% drop in S&P 500 futures, which had risen modestly during the Asian session.
The news reports Strict lockdown measures in Chinese capital of Beijing due to the rapid increase in coronavirus cases. In the meantime, mortality in the city of Shanghai rose, which threatens the optimism of a reopening. Covid lockdowns in China and growth concerns weigh on market sentiment, reviving safe-haven demand for the US dollar.
Besides, global growth concerns also continue to be renewed amid aggressive Fed tightening expectations, benefiting the sentiment around the USD. Investors would also prefer to hold the US currency ahead of CB consumer confidence data and durable goods orders data.
Meanwhile, Wednesday’s quarterly Australian inflation release keeps Aussie bulls capped. “The annual rate is expected to have reached 4.6% in the first quarter of the year, rising from 3.5% in the fourth quarter of 2021. The RBA core CPI is forecast at 3.4%, much higher than the previous 2.6% and above the upper end of the Reserve Bank of Australia’s target for the first time in over a decade.” FXStreet, Valeria Bednarik Inflation data will be key for the RBA’s next monetary policy action.
AUD/USD technical levels
Source: Fx Street
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