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AUD/USD retreats from highs of 0.6529 after a surprise spike in Australian inflation data.
The U.S. dollar index was higher on solid U.S. economic indicators and investors remaining cautious ahead of a key GDP report.
Analyst expectations for a rate cut from the Reserve Bank of Australia remain despite a strong first-quarter inflation report pointing to strong economic activity in Australia.
AUD/USD closed 0.15% higher on Wednesday, but retreated from a weekly high of 0.6529, which was hit after a better-than-expected inflation report. Economic data from the United States boosted the greenback, with the U.S. Dollar Index (DXY) rising 0.13% to 105.82. AUD/USD was trading at 0.6495, down 0.02% as the Asian trading session began.
AUD/USD slides below 0.6500 on strong US data
Wall Street was mixed on Wednesday after better-than-expected earnings from economic and telecom companies weighed on U.S. stocks. Investors remained cautious ahead of Thursday’s U.S. gross domestic product report, which is expected to show the world’s largest economy grew 2.5% quarter-on-quarter in the first quarter of this year. Meanwhile, initial jobless claims are expected to rise to 214,000 from 212,000.
Beyond that, past data released on Wednesday suggested the U.S. economy remains solid. Mach durable goods orders increased 2.6% monthly, higher than the previous 0.7% and exceeding expectations of 2.5%. Core goods (excluding transportation) rose 0.2% monthly, an improvement from February’s 0.1% but below expectations of 0.3%.
During the Asian session on Wednesday, the Australian Bureau of Statistics (ABS) announced that the inflation rate for the first quarter of 2024 was far higher than the expected 0.6%, with a quarter-on-quarter increase of 1%. On an annual basis, the consumer price index (CPI) rose 3.6% year over year, below expectations of 4.1% but above expectations of 3.4%.
