Weekly Australia CPI Report; Dec 5th 2022admin 8 December 2022
The Consumer Price Index measures the change in prices of goods and services from the consumer’s perspective. This index is an important market report for measuring consumer purchasing power and inflation that can affect the currency in question in two ways. The release of a figure that is higher than the expectations of the consumer price index will raise the interest rate and increase the value of the Australian dollar.
On the other hand, the increase in the consumer price index during the economic recession may cause the economic crisis to worsen and the value of the Australian dollar to fall. Australia’s Consumer Price Index (CPI) was released at 4:00 a.m. on November 30 at a rate of 7.3%, which was 0.2% above forecasts. Furthermore, it should be noted that the previous figure for this index was 6.9%.
Following the publication of CPI, changes in the market has been noticed. AUD/USD has struggled to hold on to the 0.6800 level. This is despite a recent rebound from daily lows ahead of the release of US November employment figures early on Friday as traders remained cautious. One of the reasons for the recovery of AUD/USD can be linked to the comments of Philip Lowe, Governor of the Central Bank of Australia during his last speech. The interest rate reduction policy has been challenged by this senior financial policymaker.
At the same time, he said that the board had already discussed the consequences and costs of not raising interest rates. RBA Chief Philip Lowe also said: “Higher interest rates will have a delayed impact on the economy.” The Australian dollar fell against the US dollar following the release of a positive US jobs report that showed rising wages, putting pressure on the Federal Reserve to raise interest rates. At the time of writing, AUD/USD is trading at 0.6771 after hitting a daily high of 0.6832. Positive employment data from the United States increased the strength of the US dollar against other currencies, including the Australian dollar.