Aussie Falls On Weak Inflation Data

(RTTNews) - The Australian dollar weakened against other major currencies in the European Session on Wednesday, after the release of data showing that the nation's consumer inflation rose less-than-expected in the three months to June. Markets expect that the RBA will pause its rate hike cycle in the monetary policy meeting due next week.

Data from the Australian Bureau of Statistics showed that the consumer price inflation slowed more than expected to 6.0 percent in the second quarter from 7.0 percent in the previous quarter. The expected rate was 6.2 percent.

On a quarterly basis, consumer prices rose at a slower pace of 0.8 percent after posting 1.4 percent increase. A similar pace of slow inflation was last reported in the third quarter of 2021.

Trimmed mean annual inflation of 5.9 percent was also lower in the June quarter compared to 6.6 percent in the March quarter.

In the European trading today, the Australian dollar fell to a 5-day low of 94.78 against the yen, from yesterday's closing value of 95.63. The aussie may test support near the 93.00 region.

The aussie edged down to 1.6401 against the euro, from Tuesday's closing value of 1.6266. On the downside, 1.66 is seen as the next support level for the aussie.

Against the U.S., the New Zealand and the Canadian dollars, the aussie slipped to 0.6734, 1.0875 and 0.8888 from yesterday's closing quotes of 0.6789, 1.0910 and 0.8941, respectively. If the aussie extends its downtrend, it is likely to find support around 0.65 against the greenback, 1.07 against the kiwi and 0.86 against the loonie.

Meanwhile, the other Antipodean currency, the NZ dollar, also slipped against its major currencies after the release of the inflation data.

The NZ dollar fell to 2-day lows of 0.6184 against U.S. dollar and 87.25 against the yen from yesterday's closing quotes of 0.6221 and 87.60. If the kiwi extends its downtrend, it may find support around 0.60 against the greenback and 85.00 against the yen.

Against the euro, the kiwi edged down to 1.7852 from yesterday's closing value of 1.7762. On the downside, 1.80 is seen as the next support level for the kiwi.

Looking ahead, U.S. mortgage approvals data, U.S. new home sales data for June and U.S. EIA crude oil inventories data are slated for release in the New York session.

At 1:00 pm ET, the U.S. Federal Reserve will announce its interest rate decision. The economists expect an interest-rate hike of 25 bps from 5.00 percent to 5.25 percent.

Following the announcement, the Fed Chair Jerome Powell will conduct a press conference on the interest rate decision.