AUD halted its growth. Overview for 26.12.2024

The Australian dollar, paired with the US dollar, has halted its rise. The current AUDUSD exchange rate stands at 0.6555.

The Aussie had been on the rise for eight consecutive sessions. Given the continued weakness of the US dollar, the AUD’s temporary pause is attributed to technical factors and the upcoming statistics.

The Consumer Price Index (CPI) likely accelerated to 3.5% y/y in January from 3.4% in December. A sturdier outcome here may prompt discussions regarding another interest rate increase by the Reserve Bank of Australia. This is particularly likely considering the RBA has not ruled out such an increase, as indicated in the recent meeting minutes released earlier.

The RBA has stated that it requires more time to gather price data. The central bank needs to be assured that inflation is returning to its target levels before ruling out further increases in the cost of borrowing in the country.