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Aussie will again be the focus of attention on Wednesday as we receive the latest version of the CPI data. Analysts expect a consensus for a quarterly figure of 0.5% and an annual figure of 2.2%.
Recall that the RBA seeks to keep inflation in its target range of 2 to 3% per annum. So even a mediocre figure at this point means that we are where the RBA is theoretically happy.
There are some other factors that weigh on the RBA at the moment. Weak wage growth hurts and is a subject of concern to the RBA. As inflation increases, wages decline in real terms
. The other concern was previously the prices of real estate. Like the recent boom, now seems to hesitate and that means there is less incentive for a rate hike.
All of this means that there is really no pressure for the RBA to raise rates for the moment. Forecasts are still for something to happen in 2019. But until there is more solid data on the economy or inflation sneaks up to the upper limit of this range, so I suspect that the RBA is staying the course.
Aussie Outlook
The AUD / USD was one of the weakest yesterday, and I suspect the trend will continue
The USD still has room to bounce back after the sale last week. And that means that there will be a pressure on the AUD / USD
The Australian still maintains its resistance at 0.7500 and in truth, I will seek to sell any spike at this level .
In fact, any spike at 0.7450 is a sales opportunity. As Aussie continues to crush and return to the down channel.
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