GBP/AUD analysis as Australia consumer inflation retreats

July 26, 2023 11:00 AM AEST | By Invezz

GBP/AUD analysis as Australia consumer inflation retreats — Image source: Invezz

Australia inflation data

The most important AUD news came out on Wednesday after the country’s statistics agency published the latest consumer inflation data. The numbers showed that Australia’s inflation dropped from 1.4% in Q1 to 0.8% in Q2. That decline was lower than the median estimate of 1.0%. It dropped from 5.6% to 5.4% on a YoY basis.

Meanwhile, the closely watched trimmed mean CPI dropped to 5.9% while the weighted mean CPI fell to 5.4%. These numbers showed that Australia’s inflation was moderating albeit at a slower pace than expected. A shortage of rental properties was the main cause as rents increased by 6.7% during the quarter.

In a statement, Treasurer Jim Chalmers noted that the government was working hard to lower inflation. It was focused on three important points, including having a bigger budget surplus, providing support, and focusing on supply-side issues.

Analysts expect that the Reserve Bank of Australia (RBA) will still continue tacking inflation in the coming months. A likely scenario is where the bank will leave rates unchanged in the next meeting followed by a hike in the next month.

The GBP/AUD price is also reacting to the economic situation in the UK. In its report on Tuesday, the IMF said that stronger consumer spending will help prevent the UK from falling into a recession The pair will next react to next week’s Bank of England decision in which the bank is expected to hike rates by 0.25%.

GBP/AUD technical analysis

The pound to AUD exchange rate drifted upward after the latest Australian inflation numbers. It moved above the ascending trendline shown in black. The paair was also oscillating at the 25-day and 50-day moving averages while the Klinger oscillator pointed upwards.

Therefore, the GBP/AUD price will likely remain in this channel ahead of the upcoming Bank of England (BoE) decision. If this happens, the next level to watch will be at 1.9200. The stop-loss of this trade will be at 1.9000.

The post GBP/AUD analysis as Australia consumer inflation retreats appeared first on Invezz

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.