The
Australian
Dollar
(AUD)
upheld
its
positive
trajectory
against
the
USD
in
Friday’s
session,
rising
by
0.30%
to
0.6780.
The
AUD
resumed
its
gains
with
market
participants
adjusting
their
stakes
on
the
Federal
Reserve
(Fed)
after
the
release
of
US
inflation
figures.
Hot
Producer
Price
Index
(PPI)
figures
form
the
US
didn’t
trigger
a
recovery
in
the
Greenback.
The
Reserve
Bank
of
Australia
(RBA)
is
poised
to
be
among
the
last
G10
nations’
central
banks
to
initiate
rate
cuts,
a
factor
that
could
extend
the
AUD’s
gains.
The
AUD/USD
maintains
a
bullish
stance,
retaining
the
heights
reached
in
January.
However,
the
Relative
Strength
Index
(RSI)
and
Moving
Average
Convergence
Divergence
(MACD)
indicate
that
they
are
nearing
overbought
terrain,
suggesting
a
possible
impending
correction.
Buyers
are
looking
to
maintain
the
0.6760-0.6780
range
and
surpass
the
0.6800
area
if
possible.
Conversely,
the
0.6670,
0.6650
and
0.6630
levels
are
set
as
support
ranges
in
case
of
a
correction.
Inflation
measures
the
rise
in
the
price
of
a
representative
basket
of
goods
and
services.
Headline
inflation
is
usually
expressed
as
a
percentage
change
on
a
month-on-month
(MoM)
and
year-on-year
(YoY)
basis.
Core
inflation
excludes
more
volatile
elements
such
as
food
and
fuel
which
can
fluctuate
because
of
geopolitical
and
seasonal
factors.
Core
inflation
is
the
figure
economists
focus
on
and
is
the
level
targeted
by
central
banks,
which
are
mandated
to
keep
inflation
at
a
manageable
level,
usually
around
2%.
The
Consumer
Price
Index
(CPI)
measures
the
change
in
prices
of
a
basket
of
goods
and
services
over
a
period
of
time.
It
is
usually
expressed
as
a
percentage
change
on
a
month-on-month
(MoM)
and
year-on-year
(YoY)
basis.
Core
CPI
is
the
figure
targeted
by
central
banks
as
it
excludes
volatile
food
and
fuel
inputs.
When
Core
CPI
rises
above
2%
it
usually
results
in
higher
interest
rates
and
vice
versa
when
it
falls
below
2%.
Since
higher
interest
rates
are
positive
for
a
currency,
higher
inflation
usually
results
in
a
stronger
currency.
The
opposite
is
true
when
inflation
falls.
Although
it
may
seem
counter-intuitive,
high
inflation
in
a
country
pushes
up
the
value
of
its
currency
and
vice
versa
for
lower
inflation.
This
is
because
the
central
bank
will
normally
raise
interest
rates
to
combat
the
higher
inflation,
which
attract
more
global
capital
inflows
from
investors
looking
for
a
lucrative
place
to
park
their
money.
Formerly,
Gold
was
the
asset
investors
turned
to
in
times
of
high
inflation
because
it
preserved
its
value,
and
whilst
investors
will
often
still
buy
Gold
for
its
safe-haven
properties
in
times
of
extreme
market
turmoil,
this
is
not
the
case
most
of
the
time.
This
is
because
when
inflation
is
high,
central
banks
will
put
up
interest
rates
to
combat
it.
Higher
interest
rates
are
negative
for
Gold
because
they
increase
the
opportunity-cost
of
holding
Gold
vis-a-vis
an
interest-bearing
asset
or
placing
the
money
in
a
cash
deposit
account.
On
the
flipside,
lower
inflation
tends
to
be
positive
for
Gold
as
it
brings
interest
rates
down,
making
the
bright
metal
a
more
viable
investment
alternative.
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