AUD/USD Holds Firm as US CPI Meets Expectations

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AUD/USD Holds Firm as US CPI Meets Expectations

AUD/USD briefly spiked to just below 0.7100 after US July CPI met expectations, before quickly returning to around 0.7060. Headline CPI rose 0.1% m/m while core CPI increased 0.2% m/m, leaving the USD only briefly weaker before recovering above 100 points. Strong investor risk appetite, residual expectations for another RBA rate increase and the global economy’s resilience to the energy supply shock continue to support AUD/USD around 0.70. Oil prices have also stabilised, with spot prices remaining only modestly above their long-term average and posing a limited threat to global growth.
The CPI details showed notable price increases in computers and peripherals, rents and airfares, while the Cleveland Fed’s trimmed-mean measure rose a solid 0.2% m/m.
 Despite these pressures, the FOMC is unlikely to rush into an interest-rate hiking cycle at its September meeting, with market pricing for a 25bp increase falling from 48% to 40%. AUD/JPY edged higher to 112.6 while USD/JPY rose to 159.50, keeping the risk of further JPY-buying intervention in focus. AUD/NZD held around 1.2050 amid ongoing political uncertainty in New Zealand, while upcoming UK Q2 GDP and New Zealand inflation expectations will provide further direction for the respective currency pairs. Oil has averaged around US$91/barrel in 2026, only moderately above its long-term average, suggesting the ongoing Middle East conflict has so far delivered a more limited energy shock to the global economy than initially feared.

 

General Market

Wall Street

  • Dow Jones: -0.04% to 53,775
  • S&P 500: +0.26% to 7,748
  • Nasdaq:  +0.18% to 29,747
Asia-Pacific
  • ASX 200: -0.26% to 9,131
  • Nikkei: -0.33% to 68,725
  • Shanghai Composite: +0.32% to 4,575
Europe
  • FTSE: -0.07% to 10,812
  • DAX: -0.23% to 26,331
  • CAC: -0.22% to 8,690

 

Headlines to Watch

United States

  • PPI + jobless claims → key tests for inflation and Fed expectations
  • Producer-price pressures → could influence September rate pricing
  • Labour-market resilience → important after recent employment weakness

Europe

  • UK Q2 GDP → key test of economic momentum
  • UK industrial production → manufacturing weakness remains in focus
  • Eurozone industrial output → growth momentum ahead of the ECB outlook

Asia-Pacific

  • Japan PPI → inflation pressure and BoJ tightening expectations
  • NZ inflation expectations → important for RBNZ policy
  • Australia housing finance → gauge of household credit and housing demand

Global / Geopolitics

  • Middle East conflict → oil prices remain a key inflation and growth risk
  • Oil supply resilience → limits the economic impact of the energy shock
  • Risk appetite → continues to support higher-beta currencies including AUD
Currency PairMid-market Rate
AUD/USD0.7065
AUD/NZD1.2056
AUD/JPY111.60
AUD/CNY4.7645
AUD/EUR0.6128
AUD/GBP0.5233
AUD/HKD5.5437

 

 

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