AUD Second Quarter Increase | Xtreamforex

In the second quarter of 2022 Australian inflation data has increased to 6.1%, but below the agreed expectations relaxing the fear of a surprising 75bp rate increase when the RBA has a meeting next week.

CPI rose by 1.8% Quarter On Quarter(QoQ) and 6.1% Year On Year(YoY). This was the highest increase since the introduction of the Goods and Services tax in the beginning of 2000.

The RBA’s preferred measure of inflation, increased by 1.4% Quarter On Quarter and 4.9% Year On Year, which was above the market expectations of 1.2% QoQ and 4.7% YoY.

Necessary inflation is now 190bp above the top of the RBA’s 2-3% target band, and the yearly trimmed means was highest since the ABS first published the series back in 2003.

The most important price increase was in

1. New residence purchases by owner’s/occupiers driven by high building constructions going on, combined with the materials and labor shortages.
2. Fuel prices rose for the eight consecutive quarter
3. Because of increased prices in fuel, Furniture transport and manufacturing costs.
4. Vegetables rose due to heavy rain flooding in Queensland and New South Wales, which damaged crops and farm infrastructure.

Meanwhile the trend of higher inflation towards the RBA’s 7% target remains in place, softer than expected headline print has prompted the interest rate market to remove all chances of a 75bp rate increase.

The release of AUDUSD fell from 0.6950 to a low of 0.6917, retreating from the resistance of 0.6960, which included downtrend from April 2022 high of 0.7661

AUDUSD remains below 0.6967, the downtrend remains in place. A sustained close at the end of this week above 0.6985 would be an initial indication a tradable low is in place at 0.6681 and that a more substantial rally can develop.