The Australian Dollar (AUD) edged higher to a 4-week high of 0.6644 against the US Dollar (USD) in early week moves as risk sentiment improved. As the US Federal Reserve delivered their inflation report prices in the cross plummeted 120 points to 0.6500 levels with markets not happy about the uptick in inflation from 3.4% y/y at 3.5%. This is the third straight month CPI has increased above expectations. The Fed now will dial back interest rate cuts predicted earlier this year most likely from June to September. Inflation cooled at the end of 2023, but the Fed now seems less confident they will see levels around 2.0% targets in 2024 making for a “higher for longer” theme.
The current interbank midrate is: AUDUSD 0.6540
The interbank range this week has been: AUDUSD 0.6497- 0.6643