- AUD/USD slips perpendicularly to 0.6350 as headline inflation remains higher due to rising gasoline prices.
- The monthly headline consumer inflation rose by 0.4% while investors forecasted a growth rate of 0.3%.
- Australia’s one-year forward consumer inflation expectations are seen rising to 4.8%, against the former release of 4.6%.
The AUD/USD pair drops vertically below the round-level support of 0.6400 as the United States inflation report for September showed that headline Consumer Price Index (CPI) rose more than expectations due to higher gasoline prices.
The S&P500 turns volatile after hot headline inflation data while core CPI softens as expected. The monthly headline consumer inflation rose by 0.4% while investors forecasted a growth rate of 0.3%. In August, the economic data grew by 0.6%.
Meanwhile, the underlying consumer prices expanded at a 0.3% pace as forecasted. The annual core CPI decelerated to 4.1% as expected. Last month, the economic data was recorded at 4.3%. The consistent decline in core inflation and deepening Middle East tensions are expected to allow the Federal Reserve (Fed) to keep the interest rates unchanged at 5.25-5.50%.
The US Dollar Index (DXY) soars to near 106.30 on expectations that progress on the road to price stability would slow. The 10-year US Treasury yields recovered losses and jumped to 4.62%. Meanwhile, Fed policymakers supported for keeping interest rates unchanged as rising US Treasury yields would decline spending and investment ahead.
Apart from that, weekly jobless claims remained almost unchanged last week. Individuals claimed jobless benefits for the week ending October 6 remained steady at 209K, a little lower than expectations of 210K.
On the Australian Dollar front, investors await one-year forward consumer inflation expectations which will be published on Friday. As per the expectations, the economic data is seen rising to 4.8%, against the former release of 4.6%. This could force Reserve Bank of Australia (RBA) policymakers to deliver one more interest rate hike by 25 basis points (bps) to 4.35% by the year-end.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0500, looks to post weekly losses
EUR/USD extended its daily decline toward 1.0500 in the second half of the American session, pressured by the souring market mood. Despite the bullish action seen earlier in the week, the pair remains on track to register weekly losses.
GBP/USD falls below 1.2150 as USD rebounds
Following an earlier recovery attempt, GBP/USD turned south and declined below 1.2100 in the second half of the day on Friday. The negative shift seen in risk mood amid rising geopolitical tensions helps the US Dollar outperform its rivals and hurts the pair.
Gold advances to fresh multi-week highs above $1,920
Gold extended its daily rally and climbed above $1,920 for the first time in over two weeks on Friday. Escalating geopolitical tensions ahead of the weekend weigh on T-bond yields and provide a boost to XAU/USD, which remains on track to gain nearly 5% this week.
Bitcoin could be an alternative to US-listed companies but not in the short term
Bitcoin has dipped below $27,000, adding to the subdued cryptocurrency market sentiment. While short-term price concerns persist, analysts predict a rebound based on historical figures.
Nvidia Stock Forecast: NVDA slips as Biden administration attempts to close AI chip loophole
Nvida's stock price opened marginally lower on Friday after Reuters reported that the Biden administration is attempting to close a loophole that allowed Chinese companies access to state-of-the-art computer chips used for AI.