**AUD/USD Holds Steady in Quiet Markets Anticipating US Inflation Data
(Adapted from Econotimes.com, original reporting by Abhishek Goel)**
**Introduction**
The Australian dollar (AUD) edged slightly higher against the US dollar (USD) on the morning of June 10th, 2022, during a session marked by subdued activity as traders exercised caution ahead of the release of key inflation data from the United States. Traditionally, currency pairs such as AUD/USD respond sharply to economic indicators from the US, since these indicators often affect Federal Reserve policy expectations and broader market sentiment. This article synthesizes the key movements, underlying drivers, and market expectations that currently define the AUD/USD landscape, while supplementing information with recent data from other reputable sources.
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**Current Market Overview: AUD/USD**
– As of the latest Asian session, AUD/USD was trading around 0.7213, marking a mild gain for the Australian dollar.
– The currency pair remains in a narrow trading range, reflecting a general market reluctance to take significant positions ahead of the anticipated US Consumer Price Index (CPI) data due later in the day.
– The immediate market sentiment leans neutral to mildly positive for the Australian dollar.
**Key Drivers Behind AUD/USD Price Action**
1. **Anticipation of US Inflation Data**
– Traders and investors remain focused on the upcoming US CPI data.
– The consensus expectation among economists is for core CPI to remain robust, signaling persistent inflation.
– Data from the Bureau of Labor Statistics indicated a 0.3 percent month-over-month increase in core CPI in May, slightly edging above the Federal Reserve’s long-term target.
– High inflation figures may fuel expectations for more aggressive monetary tightening by the US Federal Reserve, traditionally a source of strength for the US dollar relative to other major currencies.
2. **Risk Appetite and Market Sentiment**
– Global risk appetite is subdued with most participants choosing to delay major trades until after the US economic data releases.
– Australian equity markets, and Asian equity markets in general, traded with little momentum, reflecting a “wait and see” approach.
– The relatively benign risk environment, combined with thin trading volumes, is keeping the AUD/USD in a tight range.
3. **Recent Australian Economic Developments**
– Key data releases from Australia included better-than-expected Gross Domestic Product (GDP) growth for the first quarter, supporting the local currency.
– Wider commodity markets show some softness, with iron ore—Australia’s major export—pulling back from recent highs, though demand remains broadly supportive.
– The Reserve Bank of Australia (RBA) recently raised interest rates but indicated a measured approach to future tightening, which has tempered aggressive gains in the AUD.
**Technical Analysis: Key Levels to Watch**
– Immediate resistance for AUD/USD is seen at 0.7265. This level represents a recent swing high in the currency pair’s price action.
– Support
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