Aussie Snaps Losing Streak As CPI Beat Adds Pressure On RBA To Act

Better than expected consumer inflation figures pushed AUD/USD higher in Wednesday's Sydney trade, but the rate reversed gains into the European session. It still eked out some marginal gains come the end of the day, snapping a four-day losing streak.

• The release of inflation data prompted hawkish RBA repricing ahead of next Tuesday's monetary policy review. Markets are currently pricing ~18bp worth of tightening at the upcoming Board meeting.
• Complicating the RBA's job is the ongoing federal election campaign, which sees inflation coming to the fore, as political leaders are trying to prove their economic management credentials.
• Shadow Treasurer Calmers noted that rising living costs will be the "legacy of Scott Morrison's economic mismanagement," while the PM said that he would not be worried by a cash rate rise next week.
• AUD/USD changes hands at $0.7122, a touch lower on the day. Bears look for a break below $0.7101, which limited losses on Wednesday. This would clear the way to key near-term support from Feb 24 low of $0.7095. Bulls look to a break above Monday's high of Apr 25 high of $0.7261, which would expose the 50-EMA at $0.7332.
• Australian terms of trade and factory-gate inflation data will be published today and tomorrow respectively.