The Australian dollar is dropping heavily after this morning’s CPI data came in below estimates. This may delay potential rate hikes in 2019 and may even open up the possibility of rate cuts. The AUD/USD dropped to within reach of the March lows and is trading at 0.7035. The heaviest selling is happening on the AUD/JPY which has plunged to the 78.50 level, reversing all of April’s carefully made gains in just five sessions.
Compounding the AUD/USD’s losses is the rise of the US dollar as it makes gains for the second full trading session of this week.
The euro is also caught up in the dollar’s ascent, with the EUR/USD lower after testing support at 1.1200 yesterday. The EUR/CHF is having a rare off day as the pair slips back from support around 1.1450 as the Swissy holds its ground. The EUR/GBP remains in a tight range, with the April uptrend still a struggle.
The GBP/USD continues to suffer, after plunging through the 1.3000 yesterday – Trading at 1.2935 this morning.
The USD/CAD is building on yesterday’s gains and is set to test support around the 1.3450 level.
After a consistent rally from the March lows and a big surge yesterday, the USD/CHF is unchanged today as the dollar and Swissy cancel each other out.
The US dollar and yen are cancelling each other out, with the USD/JPY slightly lower and below resistance at 112.00. The EUR/JPY is lower for the second straight day, while the GBP/JPY is continuing its down trend.
Today, we have German Ifo Business Climate at 08.00.
UK Public sector net borrowing is at 08.30.
At 14.00, we get the BOC policy report and overnight rate. The press conference follows at 15.15.
While attention is on the AUD/USD today, all dollar pairs are under pressure this morning. The EUR/USD sits just above support, but storm clouds continue to gather over the European economy.