Today, Australian Dollar came under pressure of two factors – weaker than expected CPI and dovish comments of the RBA’s Lowe. Wehavealreadytalkedaboutitrecently. When a local currency appreciates slows down, and it means there is no need to rush with further rate hikes.
Given the export and tourist activity of the country, Australia doesn’t need expensive currency. And this is what RBA chairman talked today. He said there is no sense to move in lock step with central banks that are hiking. Sounds like a hint on no tightening in the nearest future. Sounds like it’s time to sell AUD?
If the Fed shows hawkish tone tonight, AUDUSD may gather the pace of its depreciation with the nearest target at 0.7840 followed by 0.7800.