Snapshot: AUD/USD trades at 0.7156 (-0.35%) after Australian CPI data printed mixed; headline y/y at 4.8% vs 3.7% previously, but m/m 1.3% inline. Attention now shifts to the 14:00 ET Federal Funds Rate decision and FOMC statement.
- Aussie CPI print at 11:30 AEST showed a m/m headline of 1.3% (forecast). A softer trimmed-mean at 0.3% m/m may temper immediate RBA hike expectations, despite headline pressures.
- Watch US rates volatility post-FOMC statement at 14:00 ET. A hawkish surprise could amplify AUD weakness. Positioning is crowded long (87th percentile), increasing squeeze risk.
Bias into NY: We favour further AUD/USD downside towards 0.7130, contingent on a hawkish tilt from the Fed and a further rally in the DXY which is currently at 98.61. US-AU 10Y yield spread at -65bp continues to pressure the pair.