After the disappointing release of the CPI in Australia, the Aussie-dollar plummeted, with the Aussie being the target of today’s sell-off.
The headline inflation reached 0.6% QoQ compared to the expected 0.8%, while the trim mean is sitting at 0.4% QoQ against the 0.5% both prior and consensus. The Aussie bulls are now looking for cover as unrounded, the core inflation rate came in at 0.37%, below analysts’ expectations.
With a very strong likelihood of a move to a more hawkish Fed policy, the AUDUSD bulls should remain sidelined. Following the initial gap lower to .7745, a lower extension projects in the near future as the USD bulls call for a downside AUD exposure.
Considering the long Aussie stances against its commonwealth counterparts, AUDNZD and AUDCAD, the Aussie is expected to sink even deeper, as these positions are heading toward exits.
Analysts and investors alike will keep their eyes peeled on the London open as a test of .7700.
In Europe, GBPEUR investors keep a weather eye on the German Ifo surveys and the UK Q3 preliminary GDP report.
Meanwhile, in the United States, the new home sales and durable goods orders data will ignite the spirits as it is seen as an advocate for US growth figures.
Right across the border, the Bank of Canada (BOC) will shortly announce its monetary policy decision, followed by the press conference eagerly awaited by CAD investors. CAD bulls will also closely eye the EIA crude oil inventory report in the policymakers’ pipeline.
EURUSD trades in a quite narrow range today of 1.1790 – 1.1740 as the US-German yield spread capped gains.