AUD/USD soars after weak US data, US GDP next

<p><a href="https://api.addthis.com/oexchange/0.8/forward/facebook/offer?url=https%3A%2F%2Fwww.marketpulse.com%2Ffundamental%2Faud-usd-soars-after-weak-us-data-us-gdp-next%2Fkfisher&amp;pubid=ra-525512e4690e068c&amp;title=Marketpulse%20%7C%20Home&amp;ct=1" target="_blank"><img src="https://cache.addthiscdn.com/icons/v3/thumbs/32×32/facebook.png" border="0" alt="Facebook" /></a><a href="https://api.addthis.com/oexchange/0.8/forward/twitter/offer?url=https%3A%2F%2Fwww.marketpulse.com%2Ffundamental%2Faud-usd-soars-after-weak-us-data-us-gdp-next%2Fkfisher&amp;pubid=ra-525512e4690e068c&amp;title=Marketpulse%20%7C%20Home&amp;ct=1" target="_blank"><img src="https://cache.addthiscdn.com/icons/v3/thumbs/32×32/twitter.png" border="0" alt="Twitter" /></a><a href="https://api.addthis.com/oexchange/0.8/forward/email/offer?url=https%3A%2F%2Fwww.marketpulse.com%2Ffundamental%2Faud-usd-soars-after-weak-us-data-us-gdp-next%2Fkfisher&amp;pubid=ra-525512e4690e068c&amp;title=Marketpulse%20%7C%20Home&amp;ct=1" target="_blank"><img src="https://cache.addthiscdn.com/icons/v3/thumbs/32×32/email.png" border="0" alt="Email" /></a></p><ul>
<li>Australian inflation falls to 4.9%</li>
<li>US GDP expected to rise to 2.4%</li>
</ul>
<p>The Australian dollar has edged lower on Wednesday after sharp gains a day earlier. In the European session, AUD/USD is trading at 0.6473, down 0.10% on the day.</p>
<p><strong>Australia’s inflation slips to 4.9%</strong></p>
<p>There was good news on the inflation front as July CPI fell to 4.9% y/y, down from 5.4% in June and below the consensus estimate of 5.2%. Inflation has now fallen to its lowest level since February 2022. Core inflation, which has been stickier than headline inflation, gained 5.8% in July, down from 6.1% in June.</p>
<p>The markets are widely expecting the Reserve Bank of Australia to hold rates at the September 5^th meeting and the drop in the headline and core inflation readings could well cement a pause. Inflation remains well above the RBA’s 2% target, but it is an encouraging sign that inflation continues to move in the right direction.</p>
<p><b>Soft US numbers send Aussie sharply higher</b></p>
<p>The Australian dollar sparkled on Wednesday, climbing 0.80% and hitting a one-week high. The uptick was more about US dollar weakness than Aussie strength, as the US posted softer-than-expected consumer confidence and employment data on Wednesday.</p>
<p>US consumer confidence took a hit as the Conference Board Consumer Confidence Index fell to 106.1 in July. This was a sharp drop from the August reading of 116.0 and marked a two-year low. JOLTS Job Openings fell to 8.82 million in July, down from 9.16 million in June and well off the estimate of 9.46 million. This was the sixth decline in the past seven months, another sign that the strong US labour market is showing cracks.</p>
<p><strong>Will US GDP accelerate?</strong></p>
<p>The US releases Preliminary GDP for the second quarter later today. The consensus estimate stands at 2.4% q/q, compared to 2.0% in the first quarter. The GDP report has added significance ahead of next week’s Fed rate meeting. A reading of 2.0% or lower would likely cement a pause, while a reading above 2.0% could raise the odds of a rate hike.</p>
<p>.</p>
<p><strong>AUD/USD Technical</strong></p>
<ul>
<li>AUD/USD is testing support at 0.6467. Below, there is support at 0.6360</li>
<li>There is resistance at 0.6531 and 0.6597</li>
</ul>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/08/AUDUSD_2023-08-30_14-51-43.png"><img loading="lazy" class="alignnone wp-image-807271" src="https://www.marketpulse.com/wp-content/uploads/2023/08/AUDUSD_2023-08-30_14-51-43-300×142.png" alt="" width="400" height="189" srcset="https://www.marketpulse.com/wp-content/uploads/2023/08/AUDUSD_2023-08-30_14-51-43-300×142.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/08/AUDUSD_2023-08-30_14-51-43-1024×485.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/08/AUDUSD_2023-08-30_14-51-43-768×364.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/08/AUDUSD_2023-08-30_14-51-43-1536×727.png 1536w, https://www.marketpulse.com/wp-content/uploads/2023/08/AUDUSD_2023-08-30_14-51-43.png 1835w" sizes="(max-width: 400px) 100vw, 400px" /></a></p>