April CPI slows from March’s 4.6% YoY but stays above RBA’s 2-3% target, capping AUD downside.
The Australian Dollar retreated from a two-week high near 114.35 against the Japanese Yen after April’s Consumer Price Index eased to 4.2% year-over-year from March’s 4.6%. The data, while softer, remains above the Reserve Bank of Australia’s 2-3% target range, supporting expectations for a potential rate hike in August.
Markets had anticipated a modest pullback in inflation, though the print still signals persistent price pressures. The AUD/JPY cross briefly dipped below 114.00 but found support amid speculation of Japanese intervention to stabilize the Yen. Concerns over Japan’s energy supply disruptions also limited aggressive JPY buying.
Traders now view the correction as a potential buying opportunity, with resistance near 114.70-114.75. Strong follow-through selling would be needed to confirm a near-term top.