- Australia will publish their inflation expectations for June on Thursday, which could change bets on interest rates.
- The United States will publish the data of the US Production Price Index (IPP) for May, providing information on wholesale inflationary pressures.
- The AUD/USD is still vulnerable to these publications of macroeconomic data, which continue to promote fees expectations and consumer’s feeling.
The Australian dollar (AUD) is quoting downwards against the US dollar (USD) on Wednesday, erasing the previous profits after progress in commercial conversations between the US and China.
With aud/USD prices, staying above the psychological support level of 0.6500 at the time of writing, inflation data could continue to promote prices on Thursday.
Inflation expectations of Australia and the US IPP could capture attention
On Thursday, Australia will publish their consumer inflation expectations for June, which reflect consumers’ expectations about future inflation during the next 12 months.
Attention will focus on whether these expectations have changed from the reading of 4.1% in May. In the United States, the initial applications for unemployment subsidy will increase to 240,000 during last week, after a reading of 247,000 the previous week.
In addition, the markets will be closely observing the publication of the US Production Price Index (IPP) for May, which measures inflation at the wholesale level. The monthly IPP rate for May is expected to increase 0.2%, after a contraction of 0.5% in April.
It is projected that the annual IPP rate rises to 2.6%, from 2.4% of the previous month. During the same period, the annual underlying IPP inflation rate is expected to exclude the most volatile prices of food and energy, remain stable in 3.1%.
On Wednesday, the May Consumer Price Index (CPI) showed a surprising fall, with monthly and annual figures that fell below expectations. These results will probably influence market expectations regarding the Federal Reserve Policy Directorate (FED).
The aud/USD is listed below 0.6500
The aud/USD is currently quoting below the 61.8% of the fall from September to April, which is around 0.6549. The pair has fallen below 0.6500 at the time of writing.
The simple mobile average (SMA) has consistently acted as dynamic support, helping to maintain the short -term trend about 0.6463.
On the other hand, the 200 -day SMA, currently about 0.6430, is presented as a significant medium -term support level.
Aud/USD Daily Graph
A decisive rupture above 0.6545 could open the way for a movement towards 0.6722, which corresponds to the fibonacci setback of 78.6%.
On the contrary, a rupture of the current wedge pattern could lead to a setback to 0.6428 (the 50%Fibonacci level) or even at least 0.6339.
The price action in the next sessions will be crucial to determine whether the bullish impulse continues or reverses.
Economic indicator
Inflation report
The expectation of consumer inflation published by the Melbourne Institute It presents the expectations of consumers about future inflation during the next 12 months. The higher the expectations, the greater the effect they will have on the probability of an increase in rates by the RBA. Therefore, a high reading must be considered as positive, or bullish, for the AU, while low expectations are seen as negative or bassists.
Read more.
Next publication:
Jun 12, 2025 01:00
Frequency:
Monthly
Dear:
–
Previous:
4.1%
Fountain:
University of Melbourne
FAQS inflation
Inflation measures the rise in prices of a representative basket of goods and services. General inflation is often expressed as an intermennsual and interannual percentage variation. The underlying inflation excludes more volatile elements, such as food and fuel, which can fluctuate due to geopolitical and seasonal factors. The underlying inflation is the figure on which economists focus and is the objective level of central banks, which have the mandate of maintaining inflation at a manageable level, usually around 2%.
The consumer price index (CPI) measures the variation in the prices of a basket of goods and services over a period of time. It is usually expressed as an intermennsual and interannual variation. The underlying IPC is the objective of the central banks, since it excludes the volatility of food and fuels. When the underlying IPC exceeds 2%, interest rates usually rise, and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually translates into a stronger currency. The opposite occurs when inflation falls.
Although it may seem contrary to intuition, high inflation in a country highlights the value of its currency and vice versa in the case of lower inflation. This is because the Central Bank will normally raise interest rates to combat the greatest inflation, which attracts more world capital tickets of investors looking for a lucrative place to park their money.
Formerly, gold was the asset that investors resorted to high inflation because it preserved their value, and although investors often continue to buy gold due to their refuge properties in times of extreme agitation in the markets, this is not the case most of the time. This is because when inflation is high, central banks upload interest rates to combat it. Higher interest rates are negative for gold because they increase the opportunity cost to keep gold in front of an asset that earns interest or place money in a cash deposit account. On the contrary, lower inflation tends to be positive for gold, since it reduces interest rates, making bright metal a more viable investment alternative.
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.
