AUD/USD hit fresh four-month highs at 0.7237 on broad USD weakness and China August CPI 0.4% m/m, then eased near 0.7220 as Gulf hostilities and rallying oil capped the Aussie.
The Australian Dollar resumed its uptrend on Wednesday as a softer US Dollar and a rebound in Chinese inflation eased demand worries, before Gulf risk capped the move.
AUD/USD hit fresh four-month highs at 0.7237, but returned to previous ranges around 0.7220 shortly afterwards. The pair drew support from a weak Greenback trading lower across the board ahead of Friday’s US CPI.
China August CPI bounced to 0.4% month-on-month after a 0.1% July contraction, beating the 0.3% expectation; year-over-year CPI accelerated to 0.8% from 0.5%, in line with forecasts. RBA Deputy Governor Andrew Hauser’s Tuesday call for more action on inflation has markets, per Rabobank, “thinking of hikes this month and in November.”
Escalating Middle East hostilities and rallying oil are likely to limit Aussie rallies — Iran’s Tuesday attack on a US Navy warship and a Jordan airbase, US hits on Iranian oil tankers in Hormuz, and Houthi strikes on Saudi oil facilities. Soft prior oil tapes: WTI EU ~$92.70 and Asia Brent-near-$100 wire split.
Follows Asia’s AUD/USD ~0.7210 four-day streak halt.
Also see: AUD/USD Eases Near 0.7160 From Four-Month High as Firmer USD Caps Gains.
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