AUD/USD Below 0.9390 Before CPI Data

The Australian dollar managed to hold firm and briefly broke above 94 U.S. cents after the central bank chief chose not to talk down the currency at a speech on Tuesday.  It last stood at $0.9394, having reached a two-week high of $0.9423 overnight.

Aussie bulls are now keenly awaiting domestic inflation data due at 0130 GMT. An upside surprise is likely to trigger a bigger market reaction given futures markets have priced in a 36 percent chance of an interest rate cut by year-end.

The annual underlying inflation rate is expected to remain fairly steady at 2.7 percent, while the headline is seen creeping up to 3.1 percent, just above the Reserve Bank of Australia’s 2-3 percent long-term target.

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