AUD/USD hovered just under 0.7000 on Tuesday, down about 0.25% and the weakest in G10, after an address by the RBA Governor failed to reinforce the case for further tightening. The range was roughly 35 pips, from above 0.6950 to a peak short of the figure, extending to a fifth straight week in which 0.7000 has capped gains. The remarks still described underlying inflation as too high, with potential upside from war-driven energy costs, and said demand must cool further with demand still outpacing supply, while the board remains prepared to tighten again if needed.
Australian Economic Events and Market Pricing
Market pricing shifted ahead of Wednesday’s Australian CPI at 01:30 GMT and the 11 August decision. The calendar points to 0.2% MoM versus -0.7% previously, with the annual rate at 4%; trimmed mean is seen at 0.4% MoM with the annual trimmed mean previously 3.6%, while a quarterly trimmed mean near 0.9% would push the annual pace towards 3.7% versus the 2% to 3% band. Australia added more than 76K jobs in June with unemployment at 4.4%, while May projections had lifted the June-quarter headline CPI to 4.8%; a 0.8% trimmed-mean quarter would instead pull the annual pace towards 3.5%. Offshore, Fed pricing implies just over 30% odds of a July hike, above 91% for at least one by December, and around 58% for two or more, while the RBA cash rate has been 4.35% since the third hike of the year. Iron ore has held below $100 a tonne; Korea’s benchmark fell close to 11% and Japan’s nearly 4% even as Australia’s index rose, yet the currency still lagged.
Key Events and Technical Levels
Key events include FOMC at 18:00 GMT Wednesday, US building permits at -1.5% MoM versus -1.1% Thursday, US core PCE at 0.2% MoM and 3.3% YoY, then Q2 PPI at 01:30 GMT Friday versus 3% YoY prior alongside China PMIs seen at 50 after 50.3 and 50.2. Technically, resistance sits at 0.7000 with the 50-day EMA just above, then 0.7050 and the May peak short of 0.7300; supports are 0.6950, the 200-day EMA near 0.6900, and the base above 0.6850. The daily Stochastic RSI is near 90; invalidation is a daily close above 0.7050.
