Ouch! The AUDUSD crashed all the way down to a low of 0.8962 as weak economic reports from the US called for risk aversion. Although the AUD was able to benefit from a strong headline CPI, it was unable to hold on to its gains as it gave way to the safe-haven USD.
Consumer prices posted a 1% quarterly increase, which was higher than the consensus of a 0.9% uptick. However, the annualized CPI reading slowed to 1.3%, which is its slowest increase in almost 10 years. This gave rise to speculations that the RBA might pause its rate hikes in their next monetary policy meeting.
Later on, Australia reported a 1.8% rise in its leading index of economic indicators for August. The improvement in building approvals and rally in stocks contributed much to the advancement in the leading index, which has been steadily climbing since June this year. Still, the AUDUSD was unable to recover from being heavily clobbered by risk aversion.
Today, Australia will release its new home sales report. New home sales were up by a whopping 11.4% in August after seeing marginal improvements in June and July. If the report prints another strong figure for September, then the AUD might recover some of yesterday's losses.
Watch out for the release of the US third quarter GDP reading later today. This report could cause quite a ruckus in the markets, especially if it beats the highly optimistic consensus. Economic growth in the US is expected to be at 3.2% in the third quarter after seeing a 0.7% contraction in the previous quarter. The actual figure is due 12:30 pm GMT and, if you are not a big fan of volatility, you might want to stay on the sidelines then!
Consumer prices posted a 1% quarterly increase, which was higher than the consensus of a 0.9% uptick. However, the annualized CPI reading slowed to 1.3%, which is its slowest increase in almost 10 years. This gave rise to speculations that the RBA might pause its rate hikes in their next monetary policy meeting.
Later on, Australia reported a 1.8% rise in its leading index of economic indicators for August. The improvement in building approvals and rally in stocks contributed much to the advancement in the leading index, which has been steadily climbing since June this year. Still, the AUDUSD was unable to recover from being heavily clobbered by risk aversion.
Today, Australia will release its new home sales report. New home sales were up by a whopping 11.4% in August after seeing marginal improvements in June and July. If the report prints another strong figure for September, then the AUD might recover some of yesterday's losses.
Watch out for the release of the US third quarter GDP reading later today. This report could cause quite a ruckus in the markets, especially if it beats the highly optimistic consensus. Economic growth in the US is expected to be at 3.2% in the third quarter after seeing a 0.7% contraction in the previous quarter. The actual figure is due 12:30 pm GMT and, if you are not a big fan of volatility, you might want to stay on the sidelines then!
