Weakness in the New Zealand Dollar and Australian Dollar are a result of the inflation miss in Australia on Wednesday morning. Whether the Reserve Bank of Australia pauses in July or not is hanging in the balance, and this weaker-than-expected inflation reading could tip the decision in favour of another pause.
With around a 50/50 chance of further hikes from the RBA in July, data releases have become even more important as they push the odds one way or another. This happened with the Fed and its June pause as odd swung wildly in the weeks leading up to the decision. The situation leads to currency volatility and this is evident on Wednesday as the Australian Dollar is –1.2% lower versus the US dollar following the release of CPI data.
Source: exchangerates.org.uk
