Australian Dollar remains calm after subdued Chinese CPI, US Dollar remains stable
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The Australian Dollar (AUD) recovers its recent losses on Thursday, buoyed by a risk-on sentiment in the market. The US Dollar (USD) faces challenges despite the US Federal Reserve (Fed) emphasizing its commitment to keeping interest rates elevated until inflation sustainably returns to the 2% target. The Australian currency is strengthened as RBA’s Bullock did not rule anything in or out regarding future policy actions. Chinese CPI (YoY) declined by 0.8% against the anticipated decline of 0.5% and the previous decline of 0.3%. The Australian Dollar is bolstered by hawkish remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock following the interest rate decision on Tuesday. The RBA opted to keep its Official Cash Rate (OCR) unchanged at 4.35%. Chinese Consumer Price Index (CPI) grew by 0.3% MoM in January, falling short of the expected 0.4%. However, it has been improved from the previous reading of 0.1%. The annual CPI declined by 0.8%, exceeding the anticipated decline of 0.5% and the previous decline of 0.3%. The US Dollar Index (DXY) continues its downward trend for the third consecutive session, pressured by a correction in US Treasury yields. Federal Reserve Chair dismissed the possibility of a rate cut in March. Australian Dollar price today: The Australian Dollar trades around 0.6530 on Thursday, slightly below the immediate resistance level at 0.6550. A breakthrough above this level could potentially catalyze further upward movement for the AUD/USD pair, with potential targets including the 23.6% retracement level at 0.6563 and the 21-day Exponential Moving Average (EMA) at 0.6579. On the downside, key support is anticipated at the psychological level of 0.6500. Additional support levels include the weekly low at 0.6468, followed by a major support level at 0.6450.
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