On Wednesday, the Australia statistic bureau released the consumers inflation data which increased by 3.8 percent year – over – year in the second quarter so far.
This number has been based on the expectation of the experts and higher than the first quarter of the yearly inflation. In the quarter – over – quarter, it also increases.
The consumers inflation in that period increased from 0.6% to become 0.8%. That was higher than the projection of increase of 0.7%. In the CPI data detail this morning there was a progress.
The Australian bureau of statistics said that the inflation increase is supported by the fuel increase that make the rising transportation cost of 2.8%. Another category is also contributed.
Some Categories with a Significant Contribution
Meanwhile, the other categories that contributed significantly were health costs (+1.5 percent) and home furnishings service (+1.1%). It shows the great increase.
In addition, cost increases also occurred in several other categories such as food prices (+0.5%), the alcoholic beverages and tobacco (+0.4%), housing (+0.3%).
However, the communications and leisure sectors declined by 0.6% and 0.1% so far. Respectively. Based on the area specification, Perth has the highest quarter CPI increase.
The amount is for about 1.9%. Then it is followed by Hobart with 1.1%, and Darwin with 1.0%. Meanwhile, Sydney, Canberra, and Brisbane increased by 0.8% for eeach.
AUD/USD is in a Consolidation Phase
Commonly, the release of Australian CPI data this morning did little to help the Australian Dollar move against the US Dollar. The AUD/USD pair is currently in the range of 0.7368.
It means that it is 0.15 percent higher than the daily Open level. The move did little to change the Outlook of the Australian Dollar which is still consolidating at a low level right now.
Aud is believed to still be further depressed until now. It is weighed down by the government's decision to extend the lockdown in Sydney for four weeks until August 28.
Market participants are also preparing to welcome the Fed's monetary policy announcement early tomorrow. The FOMC's hawkish statement is able to further depress the AUD/USD movements.
The FOMC meeting grabs the attention of the market. The US Federal Reserve's top policy council meeting will be held for two days. It was held to find a conclusion and best decision.
Fomc May not Change Its Policy
The announcement of the results from that meeting and press conference will be down on Wednesday local time. So far, many people made the prediction about that result.
They think that the FOMC will not change policy significantly. At the same time, observers are also concerned that the Fed will deliver a more cautious view in some months ahead.
The spread of SARS-COV-2 virus threat or the delta variant becomes the major concern. The white house yesterday announced that there is not any significant signals about the economy effect.
It is especially from the delta variant. However, the outlook can be worse quickly if the social restriction is applied again the United States of America. That is the biggest possibility.
Delta And Taper Can Affect Really Much
Kathy Lien as a representation of the BK asset management said that there are two things which can trigger the huge reaction in the US dollar trade. It is especially related to the FOMC statement.
Those are delta and taper. If the FED listed their concern due to the Delta variant, the US dollar may decline really fast. Vice versa, the different thing may happen if they ignore it.
If they also say that the tapering is closer, so that the USD can increase. The FOMC official statement maybe not states both of them explicitly. However, Jerome Powell needs to say his point of view.
