Losing Ground

The absence of notable domestic catalysts put U.S. CPI/Fed repricing in the driving seat, with greenback gyrations driving AUD/USD through the day. The pair took a hit as U.S. inflation figures topped forecasts, but a sharp pullback in the broader USD pushed AUD/USD to fresh session highs just after the WMR fix. The rate then took a nosedive on the back of hawkish comments from Fed's Bullard outlined in earlier bullets.

• RBA Gov Lowe spoke this morning, suggesting that the Reserve Bank could tolerate above 3% inflation for a while after a period of weak price growth. His colleague Ellis noted that low 4s to high 3s is a "reasonable" estimate of full employment.
• AUD/USD trades at $0.7145 at typing, 22 pips lower on the day, as Fed tightening angst returns. A break under Feb 18 low of $0.7107 would clear the way to Feb 4 low of $0.7052. Conversely, a rebound above yesterday's high of $0.7249 would open up Jan 20 high of $0.7277.
• Focus turns to the minutes from the RBA's most recent monetary policy meeting (Tuesday) & Australia's monthly labour market report (Thursday).