Australian Dollar Rises on Strong Capex and Inflation Data
The Australian Dollar (AUD) is climbing higher after new numbers showed a surprise rise in private capital expenditure (capex). In the second quarter, business investment grew by 0.2%, a small but important gain. Markets were expecting a weaker result, so this improvement gave the Aussie dollar a strong push.
The rally got even more support from fresh inflation data. The Consumer Price Index (CPI) in July jumped 2.8% year-on-year, beating the forecast of 2.3%. This higher inflation suggests the Reserve Bank of Australia (RBA) may not rush to cut interest rates, which is good news for the currency. Traders now believe the Aussie will stay supported as long as inflation remains strong.
On the other side, the US Dollar (USD) is under pressure, as doubts grow about the Federal Reserve’s next steps. With the greenback losing steam, investors are finding more reasons to move toward the Australian Dollar.
Overall, the mix of stronger capex, hot inflation, and USD weakness is giving the AUD a clear advantage in forex trading.
Impact:
Better economic data from Australia may push AUD/USD higher, as traders expect the RBA to stay firm on rates while a weaker US Dollar adds more support for the Aussie.
