Australian Dollar Rises On CPI Data

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Wednesday, following the release of a slight firmer than expected consumer price data.

Data from the Australian Bureau of Statistics (ABS) showed that the country's Consumer Price Index (CPI) increased 0.9 percent quarter-over-quarter in the first quarter of 2025, surpassing forecasts of a 0.8 percent increase and up from 0.2 percent in fourth quarter of 2024.

In Q1, the CPI increased 2.4 percent on an annual basis, exceeding the 2.2 percent prediction. While the Reserve Bank of Australia's (RBA) Trimmed Mean CPI increased 2.9 percent year over year in March, the monthly CPI remained stable at 2.4 percent year over year.

Meanwhile, data from the National Bureau of Statistics (NBS) showed that the Manufacturing Purchasing Managers' Index (PMI) in China fell to 49.0 in April from 50.5 in March. This was below the consensus of 49.9 and suggested a return to contraction. Additionally, the Non-Manufacturing PMI weakened, falling from 50.8 in March to 50.4 in April, below the forecasted 50.7.

Asian stock markets showed mixed trading today, following the broadly positive cues from Wall Street overnight, amid the ongoing uncertainty about the tariff war and fears of a global economic slowdown. There are also some positive developments on the trade front, with U.S. Commerce Secretary Howard Lutnick telling CNBC the Trump administration has reached its first trade deal.

U.S. Treasury Secretary Scott Bessent also told reporters the U.S. is "very close" to a trade deal with India, has had "substantial talks" with Japan and has "the contours of a deal" with South Korea.

Traders also seemed reluctant to make significant moves ahead of the release of key earnings and economic news in the coming days, including key U.S. inflation data for additional clues about the U.S. Fed's policy path.

Though there was less probability of an extreme half-point change, which central bank observers always regarded as unlikely, markets were still fully priced for a 25-basis point decrease in the 4.10 percent cash rate at its next Reserve Bank of Australia (RBA) policy meeting on May 20.

In the Asian trading today, the Australian dollar rose to more than a 2-week high of 1.0812 against the NZ dollar, from yesterday's closing value of 1.0756. The aussie may test resistance around the 1.09 region.

Against the U.S. dollar, the yen and the euro, the aussie edged up to 0.6418, 91.53 and 1.773 from Tuesday's closing quotes of 0.6387, 90.87 and 1.7833, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.65 against the greenback, 96.00 against the yen and 1.72 against the euro.

The aussie edged up to 0.8873 against the Canadian dollar, from an early 6-day low of 0.8824. On the upside, 0.90 is seen as the next resistance level for the aussie.

Looking ahead, German CPI data for April, Canada GDP data for February, U.S. ADP employment data for April, U.S. GDP data for the first quarter, U.S. Chicago PMI for April, U.S. personal income and spending for March, U.S. PCE price index for March, U.S. pending home sales for March and U.S. EIA crude oil data are slated for release in the New York session.