ForexLive Asia-Pacific FX news wrap: Australian CPI rise not too scary

The focus during the time zone here today was on the Australian inflation data. We only get official inflation data four times a year from Australia (and New Zealand), and todays was the info for Q2 of 2022. There is more detail in the bullets above but the summary is that while the y/y showed solid rises the q/q results were mainly as expected and are not running away to the topside. Markets were fearful that stronger than expected inflation growth would prompt a more aggressive cash rate hike from the Reserve Bank of Australia at their upcoming meeting next week (August 2, statement due at 0430 GMT that day). The CPI today looks to have locked in the long-expected 50bp rate hike and removed the likelihood of a +75bp rate hike.

Also on the data agenda were improved Industrial Profits (for June) from China as the country slowly recovers from coronavirus outbreaks and harsh restrictions.

Fresh news flow was light. Reports are that US President Biden and Chinas President Xi will speak on Thursday. It appears any tariff discussions will take a back seat to talks on Taiwan and Ukraine.

Of course, all of this is a mere placeholder ahead of the big event due Wednesday US time, the FOMC rate hike (1800 GMT) and associated press conference from Chair Powell (1830 GMT). A +75bp decision is widely expected. Full preview is here:

• FOMC video preview: Watch for a subtle shift

AUD/USD lost some points after the CPI data, NZD/USD was dragged down a little alongside. GBP, EUR, CAD are all a touch better bid against the USD, albeit in not-large ranges. USD/JPY moved back above 137.