FX.co ★ Data on inflation in Australia cooled the plans of the RBA

Despite the large increase in oil prices, the Australian dollar was under pressure in tandem with the US dollar after the release of weak fundamental statistics. This indicates a slowdown in inflation for the second quarter for this year. These indicators do not coincide with the plans of the Reserve Bank of Australia to raise interest rates in the near future.

I think we all remember that more recently, the RBA expressed itself very strongly regarding their further plans to tighten monetary and credit policy. This led to a sharp strengthening of the Australian dollar against the US dollar. This in turn could seriously affect the indicators of Australia's economic growth towards a negative direction since the appreciation of the local currency usually leads to a decline in exports.

According to the report, Australia's consumer price index in the second quarter of this year increased by 0.2% against the expert's expectations of a 0.4% increase. Compared to the same period last year, growth for the second quarter was 1.9% against economist's expectations of 2.2%.

The Reserve Bank of Australia said that employment growth allows the Central Bank to be patient with interest rates. Moreover, the monetary policy system is well-structured to overcome difficulties.

It is important to note that the current policy of the Central Bank is tied to the situation in the labor market. It also takes into account the impact on the balance of households. The main objective of the RBA is to achieve inflation at the level of 2-3%. However, according to the regulator himself, the desire for a faster inflation will create a risk for financial stability.

The speech by the RBA governor, Philip Lowe, mainly concerned the labor market and wages. It did not contain information of the further prospects of monetary policy.

Lowe noted that the central scenario envisages a gradual increase in inflation. The governor is also concerned about the lack of wage growth that will apparently continue. In his view, a gradual increase in wages would be desirable since without wage growth, the target inflation will not be achieved.

As for the technical picture of the AUD/USD currency pair, it is time for buyers to pay attention to the lower border of the 0.7880 channel. The rebound from this range may lead to a return to the 0.7980 area and further upward movement of the trading instrument with a resistance update to 038160.

The New Zealand dollar reacted to a decrease in data of the foreign trade deficit.

According to the report, New Zealand's foreign trade deficit from July last year to June of this year amounted to NZD 3.66 billion with a projected surplus of NZD 3.66 billion. Imports to New Zealand in June amounted to NZD 4.46 billion while exports amounted to NZD 4.7 billion.