AUDUSD took a break from falling; investors are analysing the inflation data.
The Australian Dollar stopped falling against the USD. The current quote for the instrument is 0.7159.
The CPI in Australia gained 2.1% q/q in the first quarter of 2022 after adding 1.3% q/q the quarter before and against the expected reading of 1.7% q/q. As a result, inflation in Australia reached its 20-year high.
According to the head of the Department of Finance, there are international factors that push inflation upwards. The biggest price surge is found in energies, 11% and 35% over the quarter and year respectively. It’s the most significant growth of energy prices since 1990.
The Department says this problem started during the pandemic, which seriously damaged supply chains. Expenses of companies and countries on charters of vessels skyrocketed, sometimes fivefold or even more. Of course, it was later reflected in retail prices.
The inflation boost may become the factor that pushes the Reserve Bank of Australia to raise the benchmark interest rate. Right now, the regulator’s attitude is rather conservative and cautious – it prefers to collect data and monitor the situation. It is this possible rate hike that helps the Aussie to reach stability after a plunge.