When are Australia's CPI numbers for Q2 and how could they affect AUD/USD?

Aussie CPI Q2 overview

CPI for the June quarter could well be a catalyst to drive some bullishness back into the Aussie should the results head anywhere close to the RBA's target of 2% trimmed. Analysts at Westpac are forecasting 0.6% on the headline Q/Q and 2.4% annual (market 0.4%qtr / 2.2%yr).

 "On our projections, we don’t expect Q2 CPI to have a material impact on current RBA thinking given that core inflation is rising but likely to remain below 2%," argued analysts at TD Securities. 

How could CPI affect AUD/USD

AUD/USD has been consolidated below the psychological and pain barrier level for the RBA of 0.8000 since the 17th July rally from 0.7786 lows to 0.7987 YTD high scored on the 19th July. A higher than expected reading in CPI towards the RBA's target could imply a more hawkish expectation from the Central Bank and thus propel the Aussie forward on rate hike expectations. The 2nd March 2015 high is located at of 0.8075. 24th July low of 0.7902 guards 0.7874 20th July low and 0.7837 17th July high on a lower than expected outcome.

Key notes

• Aussie Q2 inflation outlook, will RBA be concerned? - TDS
• AUD/USD: poised for a break of the pain barrier for RBA, 0.8000?
• AUDUSD: Neutral wait for the CPI – possibly sell rallies

About Aussie CPI

The Consumer Price Index released by the RBA and republished by the Australian Bureau of Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The trimmed mean is calculated as the weighted mean of the central 70% of the quarterly price change distribution of all CPI components, with the annual rates based on compounded quarterly calculations.