The Australian Dollar is stepping back. Overview for 25.01.2017

The AUD/USD pair is trading to the downside in the middle of the week after rather weak inflation report.

The Australian Dollar is retreating against the USD during the Wednesday trading session. The current quote for the instrument is 0.7532.

Today is the Bank Holiday in Australia, but it doesn’t prevent the country from publishing statistical reports. So, the CPI in the fourth quarter of 2016 was just 0.5% q/q, which is less than the previous reading and expectations, both 0.7% q/q. On YoY, the Inflation Rate was 1.5%, although it was predicted to increase up to 1.6%.

The inflation target of the RBA remains at 2-3%. Actual inflation readings, which are weaker than expected, may be the RBA’s ground for revising the interest rate in the near future. This was the reason why the Aussie was sold this morning.

We remind you that in 2016 the RBA decreased the rate twice and the regulator’s new management confirmed its intentions to follow the existing preventive monetary policy.

The MI Leading Index in November 2016 added 0.4% m/m after not changing in October. It seems that this report a bit diffused the impact caused by the inflation statistics.

RoboForex Analytical Department