The Aussie Dollar Plummets

The Aussie Dollar Plummets

The Aussie bulls are running for cover as the national CPI has missed the mark badly. The headline rose 0.6%QoQ versus 0.8% expected. The with the trim mean at 0.4%QoQ versus 0.5% both prior and consensus. Unrounded, the core came in at 0.37%, which is below the target band.

Implication along the  AUD interest rate curve is significant as whatever glimmer of hope the RBA hawks had riding on the CPI print has quickly evaporated in a sea of red.

With the possible move to a more hawkish Fed policy still in play, the Aussie dollar bulls should remain sidelined. After the initial gap lower to .7745 an extension lower is in-game as the USD bulls clamour for downside AUD exposure.

And  given the build-up of Long Aud versus its commonwealth peers AUDNZD and AUDCAD we should expect more AUD bloodletting as these positions head for the exits

The London open will be closely monitored as a test of .7700 looks more likely than not

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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