AUD: A$ Weakens Further On Soft Risk Appetite
AUDUSD peaked at 0.6354 but has been trending lower as the US dollar recovers (USD BBDXY flat) and the Australian January CPI printed slightly below expectations. The pair is now down 0.1% to 0.6337, close to the intraday low, but has turned helped by recovering HK/China equities. Tuesday’s deterioration in risk appetite has carried over somewhat into Wednesday’s APAC session.
- January headline CPI inflation printed slightly lower than expected at 2.5% y/y, in line with December. However, the underlying trimmed mean rose 0.1pp to 2.8%, but still below the top of the RBA’s 2-3% band. 3-month momentum has also picked up.
- Aussie has weakened against Europe with AUDEUR down 0.2% to 0.6023, after a trough of 0.6019, and AUDGBP -0.2% to 0.5001 after a high of 0.5013 earlier.
- AUDJPY is down around 0.1% to 94.50 off the intraday low of 94.25. AUDNZD is little changed at 1.1085.
- Equities are mixed with the ASX down 0.3% but Hang Seng +1.3% & S&P e-mini +0.2%. Oil prices are higher with WTI +0.4% to $69.24/bbl. Copper has jumped 4.4%, while iron ore is steady around $106/t.
- Later the Fed’s Barkin and Bostic speak and January building permits/new home sales print. Also March German GfK consumer confidence is released.
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