AUD/USD remains steady as Chinese September CPI rose 0.9% YoY and PPI surged to 5.0%, above expectations. The US Dollar experienced a decline following comments from Fed official Williams, who indicated that additional interest rate hikes in 2027 are not anticipated. Traders are poised for the release of the pivotal US September CPI data, which is anticipated to reveal a year-over-year headline inflation rate of 3.6%, indicating an acceleration in inflationary pressures. AUD/USD has appreciated for the second consecutive day, currently trading near 0.6990 during the Asian session on Wednesday.
The pair remains robust as the Australian Dollar retains its gains subsequent to the publication of Consumer Price Index inflation data from China, which is Australia’s principal trading partner. China’s National Bureau of Statistics has indicated that the annual Consumer Price Index experienced a 0.9% increase in September, a modest rise from the 0.8% recorded in August, albeit falling short of the market consensus estimate of 1.0%. In September, the Chinese Consumer Price Index experienced a month-over-month increase of 0.2%, a decline from the prior month’s 0.4% rise and falling short of the anticipated 0.3% growth. Meanwhile, China’s Producer Price Index surged 5.0% year-over-year in September, accelerating from August’s 3.8% increase and surpassing market expectations of 4.5%.
Additionally, the AUD/USD pair rises as the US Dollar softens following dovish remarks from New York Federal Reserve President John Williams. Speaking on Tuesday, Williams indicated that he still believes one more rate hike may be suitable this year, but he does not anticipate further rate increases in 2027. Despite his comments, Fed funds futures traders continue to largely anticipate that the US central bank will implement at least one interest rate increase in 2027, as indicated by the CME FedWatch tool. Attention is now directed toward the upcoming release of the US September CPI inflation data, anticipated later in the North American session. This data may provide more definitive insights into the trajectory of the Federal Reserve’s monetary policy.
Headline US CPI is anticipated to indicate a year-over-year increase of 3.6% in September, an uptick from 3.4% in August. Core CPI, which excludes volatile items, is anticipated to rise to 2.5% year-over-year, up from 2.4% in the preceding month. Strategists caution that this week’s IMF meetings could inject fresh volatility into markets, warning they “will provide a significant amount of headline risk as market participants assess policymakers’ appetite for continued tightening in an environment of elevated oil prices and broadening inflationary pressures.”
