AUDUSD Analysis – January-15-2024

AUDUSD Analysis - January-15-2024

The AUDUSD currency pair has experienced an upward trend, reaching approximately $0.67. This rise is significantly noteworthy since it diverges from its recent four-week low. This change in the currency’s value aligns with the latest economic indicators showing a slowdown in inflation within Australia.

In detail, Australia’s monthly Consumer Price Index (CPI) reported a 4.3% increase on a year-over-year basis for November. This rate decreases from the 4.9% rise in October, marking the smallest increase since January 2022. Notably, November’s inflation rate was also lower than the anticipated 4.4%. These figures suggest a cooling inflation trend.

The slowing inflation has significant implications for Australia’s monetary policy. Specifically, it suggests that the Reserve Bank of Australia (RBA) might not need to implement further interest rate hikes. The strength seen in the services sector seems to support this view. Currently, the market consensus indicates no expectation of an increase in the central bank’s interest rate, which is 4.35%. Interestingly, the likelihood of a rate cut in May, previously considered, has decreased to about 36%.

In another economic update, Australia’s trade performance showed unexpected results. The country’s trade surplus widened in November. This expansion was driven by an increase in exports and a decrease in imports. This development adds another layer to Australia’s overall economic picture.

AUDUSD Analysis - January-15-2024

AUDUSD Analysis 4-Hour Chart