AUD Falls on Disappointing CPIs, BoC and BoJ Decide on Monetary Policy

Aussie Tumbles as Australia’s Inflation Misses Estimates

The dollar traded higher against all but one of the other G10 currencies yesterday and during the Asian session today. It gained the most against AUD, NOK and NZD, while the currency against which it failed to eke out gains was JPY, with USD/JPY found virtually unchanged this morning.

AUD/USD — Technical Outlook

During the Asian morning today, after Australia released its worse-than-expected inflation numbers, AUD sold off against all of its major counterparts, including the US dollar. AUD/USD was already on a slide after peaking last week, but today’s bad CPI figures added more downward pressure on the Aussie. Looking at the 4-hour chart of AUD/USD, we can see that the pair is now trading well below its tentative upside support line taken from the low of March 8th, which paints a negative picture for now. That said, given that AUD/USD looks quite oversold on the shorter timeframe, we may see a small correction back up, before another leg of selling.

BoC and BoJ Decide on Monetary Policy

The Canadian dollar was also lower against its neighboring greenback, despite further gains in oil prices. Both Brent and WTI gained another 0.43% and 0.50% respectively, following reports that OPEC producers could decide to increase production in order to compensate for the lost Iranian oil only if there was enough demand.

EUR/CAD — Technical Outlook

Overall, EUR/CAD is still trading within a wide range between roughly the 1.4880 and 1.5215 levels. The rate is currently around the middle of that range and the pair is now trying to decide its next big move. Given that both the euro and the Loonie are slightly on the weaker side against the others right now, we will remain neutral and wait for a confirmation break through one of the key barriers, before examining any further directional move.

As for the Rest of Today’s Events

Apart from the BoC decision, today’s agenda also includes Germany’s Ifo survey for April. Expectations are for the current assessment index to have declined slightly, to 103.6 from 103.8, while the business expectations one is anticipated to have risen to 96.0 from 95.6. This would drive the business climate index up to 99.9 from 99.6. The case for a declining current assessment index and a rise in the business expectations one is supported by the ZEW indices for the month, which moved in a similar fashion.

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