US CPI Inflation Data Impacts Aussie, Kiwi Currencies
The US CPI inflation data release will be closely watched by investors, as it may influence the direction of the Aussie and Kiwi currencies, with potential implications for the global economy and financial markets. The data may also impact the price of commodities such as Brent oil and silver, which have been experiencing fluctuations in recent times.
The Australian and New Zealand dollars are experiencing a fragile state due to concerns over a potential US recession driven by tariffs, leading to risk aversion in financial markets, with the Aussie slipping 0.4% to $0.6282 and the kiwi dollar easing 0.2% to $0.5696.
The currencies are caught between opposing forces, with fears of a US slowdown hitting risk assets and a weaker US dollar offering some breathing room. Analysts believe it's not the right time to be bullish on the Antipodean currencies, citing their smaller beta to the decline in the US dollar. Local surveys show Australia's consumer confidence reached a three-year high in March, but businesses are still grappling with tepid demand.
The Reserve Bank of Australia is expected to cut rates again in May, with rates seen reaching 3.5% by the end of the year. In New Zealand, investors are pricing in three more rate cuts this year to a terminal rate of 3%. The AUDUSD price has lost momentum, approaching the key resistance of 0.6322$. The price is moving within a minor bearish channel, and the stochastic has lost its positive momentum.
The market's mood may shift with the upcoming US inflation data, which could impact the AUD/USD exchange rate, currently at a pivotal point at $0.6285. The analyst's previous forecast predicted a continuation of the downtrend, but the situation remains uncertain, and investors are advised to wait for the US CPI inflation data to make informed decisions.
