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MTrading Team • 2023-01-25

AUDUSD rallies 1.0% amid inactive markets as Australia inflation jumps

AUDUSD rallies 1.0% amid inactive markets as Australia inflation jumps

A strong inflation report from Australia joined the sluggish USD to underpin the AUDUSD run-up of nearly 1.0% during early Wednesday. New Zealand also flashed an upbeat Consumer Price Index (CPI) for the fourth quarter (Q4) but failed to lure buyers as NZ PM raised concerns about higher inflation straining the economy. 

Apart from the Aussie-NZ inflation data, there are no other major catalysts, which in turn restricted the market moves as traders wait for the US Q4 GDP. It’s worth noting that the mixed prints of PMIs and caution before the next week’s top-tier central bank meeting also limited the trade moves.

Gold price retreated while Brent Oil remain depressed as the US Dollar’s pause from further downside allowed commodities to consolidate recent gains.

Elsewhere, BTCUSD remains sideways while ETHUSD licks its wounds after declining the most in five weeks.

Following are the latest moves of the key assets:

  • Brent oil keeps pullback from seven-week high of around $86.40 by the press time.
  • Gold snaps two-day uptrend while retreating from nine-month top to $1,930.
  • USD Index remains lackluster around 102.00, probing two-week downtrend.
  • Wall Street closed mixed and confused traders in the Asia-Pacific region. However, equities in Europe and the UK are mildly bid at the latest.
  • BTCUSD and ETHUSD seesaw near the multi-day high, close to $22,700 and $1,560 as we write.
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Aussie bulls dominate amid shallow moves

Not only did Australia’s quarterly CPI and RBA Trimmed Mean CPI but the monthly inflation numbers also bolstered hawkish bets on the Aussie central banker’s next move. The RBNZ, On the other hand, appears to be less lucky despite posting firmer CPI as NZ PM cites economic woes ahead, which in turn may test RBNZ hawks moving forward.

Chatters surrounding BoJ’s new leader and the likeliness of an exit from expansionary monetary policy failed to weigh on the USDJPY. In the same way, the GBPUSD pair also couldn’t cheer market expectations of BoE’s likely rate hikes.

It should be noted that the pause in the US Dollar’s further declines joined the hopes of major central banks’ rate hikes to probe Gold buyers. Crude oil, on the other hand, had supply concerns to resist welcoming buyers.

Yields are lackluster but the US stock futures print mild losses while the equities in the Asia-Pacific region trade mixed.

Cryptocurrencies look for clear directions as fears of more bankruptcies re-emerge amid sluggish sentiment.

  • Strong buy: GBPUSD
  • Strong sell: ETHUSD, USDJPY
  • Buy: USD Index, USDCAD, Nasdaq, EURUSD
  • Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

Nothing major on the calendar

Having witnessed an active day and an uninteresting start to Wednesday, the pre-GDP anxiety will join the lack of major data/events to offer a sluggish day moving forward. As a result, the US Dollar may consolidate some of its latest losses and can exert downside pressure on commodities, as well as the Antipodeans.

May the trading luck be with you!