Australian Dollar surges as inflationary pressures accelerate further
The Australian Dollar (AUD) outperforms its major currency peers, trades 0.7% higher above 0.7100 during the late Asian trading session on Wednesday.
  • The Australian Dollar trades firmly against its major currency peers after the release of inflation data for January.
  • Higher Australian CPI prints are likely to boost hawkish RBA bets.
  • US President Trump praises his tariff policy during State of the Union’s address before Congress.

The Australian Dollar (AUD) outperforms its major currency peers, trades 0.7% higher above 0.7100 during the late Asian trading session on Wednesday. The antipodean strengthens on the expectation that higher-than-expected growth in the Australian Consumer Price Index (CPI) data for January would prompt hawkish Reserve Bank of Australia (RBA) bets.

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.19% -0.15% -0.05% -0.16% -0.66% -0.24% -0.20%
EUR 0.19% 0.04% 0.13% 0.03% -0.47% -0.05% 0.00%
GBP 0.15% -0.04% 0.13% -0.01% -0.51% -0.08% -0.04%
JPY 0.05% -0.13% -0.13% -0.10% -0.60% -0.18% -0.13%
CAD 0.16% -0.03% 0.00% 0.10% -0.50% -0.08% -0.03%
AUD 0.66% 0.47% 0.51% 0.60% 0.50% 0.43% 0.49%
NZD 0.24% 0.05% 0.08% 0.18% 0.08% -0.43% 0.05%
CHF 0.20% -0.00% 0.04% 0.13% 0.03% -0.49% -0.05%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

Earlier in the day, Australian Bureau of Statistics reported that the CPI grew by 0.4% Month-on-Month (MoM), higher than 0.1% in December. Also, MoM Trimmed Mean CPI rose at a faster pace of 0.3% against the previous reading of 0.2%.

On an annualized basis, Trimmed Mean CPI grew at a faster pace of 3.4% against estimates and the prior reading of 3.3%. Meanwhile, the headline inflation remained steady at 3.8%, while it was expected to cool down to 3.7%.

In the policy meeting earlier this month, the RBA kept the door open for further interest rate hikes even as raising the Official Cash Rate (OCR) by 25 basis points (bps) to 3.85%, citing upside inflation risks.

“Inflation pulse is too strong, and we cannot allow inflation to get away from us again,” Bullock said in the press conference post interest rate announcement on February 3.

Meanwhile, the US Dollar (USD) trades lower after United States (US) President Donald Trump’s first State of the Union (SOTU) address before a joint session of Congress. Trump applauded tariffs imposed during the administration, calling that responsible for the economic turnaround, and criticized the Supreme Court for ruling against them.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is down 0.13% to near 97.75.

Inflation FAQs

Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.

The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.

Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.

Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.

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GIÁ TRỰC TIẾP

Tên / Ký hiệu
Biểu đồ
% Thay đổi / Giá
GBPUSD
Thay đổi 1 ngày
+0%
0
EURUSD
Thay đổi 1 ngày
+0%
0
USDJPY
Thay đổi 1 ngày
+0%
0

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