AUD/USD jumped 40 pips on the soft US inflation data and hit a session high of 0.9422 but virtually all the gains have now been erased and it’s trading back at 0.9388.
There is some demand ahead of the pre-CPI low of 0.9380 then more bids at session low/55-dma at 0.9356. More at 0.9350 and 0.9340 so it will be tough going on the downside.
Stevens was out with a speech earlier but didn’t really touch on the Australian dollar. The key will be the inflation report in the day ahead. The market sees a slim chance of a rate cut over the next year but soft inflation combined with continue weak employment data could eventually mean cuts.
