Investors await Australian inflation data and the Fed’s policy decision after oil prices drop eased inflation concerns.
The Australian Dollar retreated to 0.6990 against the USD after peaking at 0.7011 in early trading, as markets brace for key economic releases. Improved sentiment followed a decline in oil prices, with WTI crude falling over 7% to near $83.70 per barrel, reducing fears of energy-driven inflationary pressures.
Prior to Wednesday’s Australian CPI report, annual inflation stood at 4.0%, while the Trimmed Mean CPI rose 3.6% YoY. The Fed’s rate decision and ADP employment data, with a four-week average of 16.5K, will also influence currency movements.
Risk-sensitive assets found support as lower oil prices slightly eased expectations of an immediate Fed rate hike.