AUD/USD jumps after Australian CPI data

FXstreet.com (Córdoba) - The AUD/USD rose strongly following inflation data from Australia and jumped from 0.8786 to 0.8855 in seconds, reaching the strongest level since last Thursday, when the employment report was released.

According to the Australian Bureau of Statistics the Consumer price index rose at a rate of 0.8% during the fourth quarter; surpassing analysts expectations for a 0.5%.

On Tuesday the AUD/USD finished practically unchanged after finding resistance at 0.8840 and being unable to consolidate above 0.8800. It was the first time for the AUD/USD not reaching mutli-year lows after four trading days. Following higher-than-expected inflation data the Aussie jumped and at the moment of writing is holding above 0.8840.

Jan 22, 2014

Australian inflation picking up more than RBA may wish for...

Australia's CPI numbers (QoQ/YoY) came at +0.8% and +2.7% in Q4 vs +0.4% and 2.4% expected, respectively. The ‘trimmed mean’ (measure the RBA focus the most), came at +0.9% and +2.6%(QoQ and YoY) vs 0.6% and 2.3% expected, respectively.

Market pricing +5bp RBA rate hikes over 12 months as a response to Aus CPI numbers

After the stronger-than-expected Australian CPI series for Q4 2013, the Australian OIS pricing has readjusted higher over 10 basis points, going from expectations of 6bps of cuts in the next 12 months to currently price 5 basis points of rate hikes. As a result, the Australian Dollar is enjoying some solid follow through across the board.