Forex News: Australian Dollar Rises On Stronger CPI Data

Australian Dollar Rises On Stronger CPI Data

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Wednesday, following the release of Australia's consumer prices data in July.

Data from the Australian Bureau of Statistics showed that the Australia's Consumer Price Index (CPI) increased 3.5 percent year over year (YoY) in July as opposed to 3.8 percent growth in June. For the reported period, the market predicted a 3.2 percent print.

Australia's monthly Consumer Price Index increased by 1.0 percent in July, above the projected 0.8 percent increase after declining by 0.1 percent. In July, the Trimmed Mean CPI rose 0.5 percent MoM. During the same time period, the Trimmed Mean CPI increased 3.6 percent year over year.

Asian stock markets traded higher amid sinking crude oil prices and lower treasury yields as traders see the U.S. move to isolate Iran economically in lieu of military strikes as a sign for easing of Middle East tensions.

However, traders were reluctant to make more significant bets ahead of key events in the coming days, including key U.S. inflation data and US Fed Chair Kevin Warsh's debut speech at the annual Jackson Hole conference.

The U.S. Treasury Department officially announced, "Operation Economic Outcast," calling it an unprecedented, whole-of-government, economic campaign against Iran and its "enablers."

While the U.S. sanctioned nearly 60 entities, individuals, and vessels that it said, "enable the Iranian regime's recklessness," traders seem relieved the Treasury stopped short of immediate secondary sanctions against other countries sustaining Iran's trade.

The New York Times reported that the U.S. is preparing to send diplomats back to embassies in the Middle East. This confirms the thought that the US is not expecting a full-scale war in the gulf in the near future.

In the Asian trading today, the Australian dollar rose to a 5-1/2-year high of 0.9962 against the Canadian dollar, from yesterday's closing value of 0.9914. The aussie may test resistance around the 1.00 region.

Against the U.S. dollar and the euro, the aussie advanced to near 3-month highs of 0.7187 and 1.6233 from Tuesday's closing quotes of 0.7165 and 1.6295, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.73 against the greenback and 1.61 against the euro.

The aussie climbed to a 4-week high of 114.30 against the yen and an 8-day high of 1.2077 of NZ dollar, from yesterday's closing quotes of 114.07 and 1.1991, respectively. On the upside, 115.00 against the yen and 1.21 against the kiwi are seen as the next resistance levels for the aussie.

Looking ahead, U.S. MBA mortgage approvals data, U.S. Core PCE price index for July, U.S. durable goods orders for July, U.S. GDP for the second quarter, U.S. personal income and spending for July, and U.S. EIA crude oil data are slated for release in the New York session.

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