Forex — Aussie Falls After Q3 CPI Comes In Weaker Than Expected

© Reuters. Aussie falls after CPI — The Aussie fell in Asia on Wednesday after the consumer price data came in weaker than expected and doubts in the increase of the interest rate forecasts for the next year.

AUD/USD traded 0.7730, down 0.59%, while USD/JPY changed hands at 113.88, below 0.03%. GBP/USD is trading at 1.3135, down to 0.01%.

To be expected, Australia reported CPI figures for the third quarter to 0.6% gain on the quarter, below the 0.8% increase and 1.8% more than a year, under the 2.0% pace seen.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.01% 93.84.

Overnight, the dollar rose against a basket of major currencies on Tuesday, buoyed by a couple of economic reports that topped expectations, investor optimism is lifting the Outlook for the US economy.

Investor optimism grew about the prospects for a solid quarter of US economic growth, after data showed services and manufacturing output rose more than expected this month.

The Markit «flash» US Manufacturing Purchasing Managers’ Index (PMI) rose to 54.5 in. In October, a reading of 53.1 in September, beating economists forecast a reading of 53.5.

Services growth, meanwhile, continued to remain steady in the midst of an increase in the recruitment of staff and business optimism in October. The ‘flash’ US Services Business Activity Index rose to 55.9, topping expectations for a reading of 55.6.

The duo’s upbeat manufacturing report helped offset an earlier wobble in the greenback amid speculation about the appointment of the next head of the Federal Reserve.

President Donald Trump said last week that he is considering to lead the three main candidates, the Federal Reserve Board: the Current Fed chair, Janet Yellen, the Fed Governor, Jerome Powell, and the Stanford University economist John Taylor.

Taylor and Powell, according to rumors, the race for the chance to lead the management of the Federal Reserve, when Yellen’s term ends in February.

Vice-President Michael Pence, however, met with the former Federal reserve board Governor Kevin Warsh on Fed chair position last week, The Wall Street Journal reported on Monday, adding that Pence was a part of the small group of senior White house officials, already the examination of the candidate.

The upward trend in the U.S. dollar weighed on the pound sterling fell 0.48% to $1.3135 in the middle after the Bank of England Deputy Governor Jon Cunliffe said that the first hike is still an «open question», which means that investors expectations of an interest rate increase in November.

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