AUD/USD kisses 0.7100 for the first time in five months as Australian Inflation soars – by Sagar_Dua24 AUDUSD Fed RBA Inflation InterestRate
ion rate at 7.8% on an annual basis for the fourth quarter of CY2022. The annual CPI has been released stronger than the expectations of 7.5% and the prior release of 7.3%. On a quarterly basis, the inflation rate has climbed to 1.9% vs. the consensus of 1.6% and the former release of 1.8%.
There is no denying the fact that a stronger-than-projected Australian inflation rate is going to compel the Reserve Bank of Australia for hiking interest rates further in its February monetary policy meeting. An Australian Financial Review survey of 34 economists conveys that RBAto continue hiking interest rates further to 3.60%. The RBA is expected to hike its Official Cash Rate by 25 basis points in February and June.
Earlier this week, Australian Treasurer Jim Chalmers cited that the worst part of the country's inflation crisis was over. He believes "The Australian economy will begin to soften a bit this year and that is the inevitable likely consequence of higher interest rates and a slowing global economy.” Fresh highs in the inflation rate indicate that the interest rate peak has not been found and the worst is not over yet.
Meanwhile, S&P500 futures have witnessed a marginal recovery after falling sharply in early Asia. Amid the absence of recovery signs in the 500-US stock basket futures, risk-perceived assets are still at risk and investors might avoid them further. is struggling in sustaining above the immediate resistance of 101.50, weighed down by weaker yields. Also, the rising chances of a smaller interest rate hike by the Federal Reserve in its February monetary policy is impacting the US Dollar.
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