The AUD/USD pair recovers from 0.6670 as Australian inflation falls to 6.9%

After the Australian Bureau of Statistics published a monthly decline in the Consumer Price Index, AUD/USD bids approached 0.6670. The Australian CPI came in at 6.9%, which is lower than the 7.4% expected and the 7.3% previously reported.

It is not anticipated that a fall in Australian inflation will compel the Reserve Bank of Australia (RBA) to forsake its present 25-basis-point rate-hiking policy. Previously, the market anticipated that RBA Governor Philip Lowe would return to a 50 basis point rate hike structure in anticipation of a price inflation index increase.

This week, the Australian Dollar has been volatile due to China's protests about the Covid limitations set to battle the epidemic. People are upset and disappointed as a result of the zero-Covid policy's prolonged limitations on the movement of people, materials, and apparatus.

As the number of Covid instances climbed, the Chinese city of Zhengzhou, home to Apple Inc.'s largest production site in China, has lifted the lockdown of its major urban areas imposed five days ago. As China's most significant trading partner, the headline may encourage the Australian Dollar.

The US Dollar Index (DXY) has pushed its auction profile above the critical 106.80 mark during the Asian session. As investors have been anxious in anticipation of Jerome Powell's first speech as chairman of the Federal Reserve (Fed), the theme of risk aversion remains intact and may persist. This will provide crucial signals about the likely monetary policy action in December.

Other significant triggers, such as US Automatic Data Processing (ADP) Employment, Gross Domestic Product (GDP), core Personal Consumption Expenditures (PCE), and the Federal Reserve's Beige Book, will also be examined closely.