The Pair Remains Up Despite Slides
The AUD/USD currency pair eventually shed some of its intraday profits on Wednesday as it was seen to be trading a few points, barely over the vicinity of 0.7100. However, it is still up by about 0.50% in the course of the first part of the European session.
AUD/USD price chart. Source TradingView
The pair saw a short period of bounce on Wednesday and broke the losing trend it had been on for four days prior, which put it at a low point of two months after the publication of the consumer inflation numbers for Australia that came much hotter than was expected. As a matter of fact, the country’s Bureau of Statistics made a report that the consumer price index beat the expectations put on it by the market as it climbed to 2.1% in the past quarter. It also happens to be the fastest pace to have moved in twenty years.
The reports from the consumer price inflation aided suggestions in the market that the Reserve Bank of Australia might be encouraged to increase interest rates from an all-time low point as early as the coming week. The speculation was considered the reason for the favorable increase in the AUD/USD currency pair value, even though a lid was put on further profits by a continuous purchase of the US dollar.
Hawkish Tone Directs Market Mood
The latest rounds of hawkish statements from top members of the Federal Open Market Committee, which include the Chairman of the Federal Reserve, Jerome Powell, confirmed the market’s speculations for aggressive monetary policy implementation by the US Federal Reserve. The financial market has now priced in that the Federal Reserve is going to increase the interest rates by 50 basis points during every one of its four consecutive policy meetings. Aside from that, the worsening economic condition globally is giving more boost to the US dollar as a safe-haven commodity as it gets pushed to its highest point since the month of March in 2020.
Meanwhile, the currency pair of the Australian and US dollars halted its positive intraday movement just before the 0.7200 benchmarks, which is now expected to be a central point and to determine the next intraday move.
Market players are now looking forward to more economic publications from the US second-tier market for some momentum in the coming North American session. It is possible that such reports influence the US dollar dynamics, which, in conjunction with the wider risk sentiment in the market, should make way for traders to get opportunities close to the AUD/USD currency pair.