Technical Analysis

Q4 Australian CPI report a tailwind for AUD – MUFG

MUFG Research sees a scope for AUD to stay supported around this week’s AU Q4 CPI print.

“The Australian dollar has clearly benefitted from building optimism
over a stronger rebound for China’s economy this year. It has already
lifted the AUD/USD rate back above the 0.7000-level for the first time
since the summer of last year. The recent strengthening of the
Australian dollar has been supported by favourable terms of trade
developments for Australia,” MUFG notes.

“It comes ahead of the release tomorrow of the latest Australian CPI
report for Q4 which is expected to show that inflation has not yet
peaked in Australia. A stronger report could provide another
tailwind for the Australian dollar by reinforcing expectations for
another 25bps hike at the RBA’s next policy meeting on 7th February
,” MUFG adds.

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