AUD/USD Hinges on RBA and US Data as Six-Week Rally Faces Test

The Australian dollar has been on a six-week winning streak but faces an important test from the RBA and US CPI. Markets have priced out a near-term RBA hike following softer Q2 inflation, leaving the US dollar and incoming US data increasingly important for AUD/USD.

A weak CPI print could undermine Fed hike expectations and give the Aussie room to push higher, while a hotter result could support the US dollar and limit gains around 71c. Expectations for a September Fed rate cut were lowered once again following a weak nonfarm payrolls report. NFP job growth fell 23k, its first contraction in over two years.

Analysts at UBS remain comfortable with a positive Kiwi view despite a mixed domestic labour report, and the NZD/USD exchange rate has pushed back towards 0.59.