The Aussie bounced back a little from its recent falls after US inflation data was released overnight.

The Aussie finished yesterday’s onshore session as it had begun, around the 0.7550 level. Leading into the offshore session the Aussie did look a little better supported than in recent nights. For most of the session it traveled quietly, until the US released its CPI data. These figures, which came in at expectation, didn’t provide any further impetus to the greenback. Market expectations of a faster paced increase in US interest rates, due to inflation, dissolved within minutes after the release. This saw a slide in the US Dollar across the board and allowed the Aussie to rally up through the 0.7600 level, registering a high of 0.7619. This morning the excitement has subsided and the Aussie is back trading around the 0.7600 level once again.

With the US Dollar slipping against most currencies there wasn’t a huge shift in cross rates, but the Aussie did managed to outperform most, pushing our crosses slightly higher. The biggest mover was the euro cross which at one stage overnight was trading above 0.6000.

With the US inflation figures coming in at expectation the market’s preparation for another push higher in the greenback ended. With an unexciting inflation number of 0.2%, there is little chance the US Fed is going to start increasing interest rates at a faster pace than they are now. This is good for the Aussie and does remove some of the recent pressure that its been under.

We still have further US data out this week, but it is of less importance compared to the last couple of releases. This gives the Aussie the chance to build support around 0.7600 which will be the main focus of buyers in the market over the next 48 hours. Any failure to do so though will see the Aussie sliding back towards 0.7550.