AUD/USD trades at 0.6870 as hotter-than-expected US inflation data cements expectations for further Fed tightening, with markets pricing a 10% chance of a 50-basis-point hike in December.
A hotter-than-expected US CPI (0.4% MoM headline vs -0.3% forecast, 0.3% core vs 0.2% expected) cemented Fed tightening for December, with a 50-bp hike now a live risk after Waller's remarks. The pair already fell 0.88% on Tuesday to 0.6870, below the triple SMA at 0.7034, with weak RSI at 37 leaving it vulnerable to further downside.
The hot US CPI (headline +0.4% vs -0.3% expected; core +0.3% vs 0.2%) halted the disinflation narrative and, combined with hawkish Fed speakers including Waller's 50-bp warning, pushed December hike odds higher—money markets fully price 25 bps with 10% odds of 50 bps. The dollar gained 0.48%-0.85% against major peers in the heat map.
The Australian Dollar fell 0.88% to 0.6870 on Tuesday after US inflation data exceeded expectations, signaling a potential 50-basis-point Fed rate hike in December. Core CPI rose 0.3% MoM, prompting hawkish warnings from Fed Governor Christopher Waller regarding central bank credibility.
US inflation came in hotter than expected, strengthening the case for a Fed rate hike in December—possibly 50 basis points—which lifted the US dollar. The pair dropped 0.88% and trades below 0.6900.
The article flags supports at 0.6865 and 0.6833, with a deeper structural level at 0.6673 where buyers would be expected to step in.
The article indicates the hot CPI report cemented the case for a Fed hike in December, with some chance of a larger 50-bp move, which supports the dollar in the near term.