AUD/USD prints fresh session high after above-forecast Aussie CPI

The already bid Aussie dollar extends gains by 10 pips, printing a fresh session high of 0.7764, with the Australian Bureau of Statistics (ABS) reported better-than-expected fourth-quarter inflation figures. The previous session high was 0.7758.

CPI beats estimates

Australia's Consumer Price Index (CPI) rose 0.9% quarter-on-quarter in the fourth quarter, beating the estimate of a 0.7% rise but down from the preceding quarter's 1.6% rise. In December, the ABS had warned of an uptick in inflation due to a jump in childcare costs. The CPI rose 0.9% in annualized terms versus expectations of 0.7%. 

The Reserve Bank of Australia's Trimmed Mean CPI rose 0.4% and 1.4% as expected in quarter-on-quarter and annualized terms, respectively. 

The above-forecast headline CPI, coupled with the uptick in the National Australia Bank's Business Confidence index, is positive news for the Aussie dollar. However, the data is not strong enough to force the RBA to reconsider its easing bias. 

That said, further gains may be in the offing as the risk sentiment has been boosted by coronavirus vaccine updates and cautiously optimistic IMF. 

The Biden administration said Tuesday that it would purchase 100 million doses each of the vaccines made by Pfizer Inc and Moderna Inc, increasing the overall total doses to 600 million. 

Meanwhile, the International Monetary Fund (IMF) revised the 2021 global economic growth forecast higher to 5.5% versus 5.2%. 

At press time, AUD/USD is trading near 0.7754, representing a 0.10% gain on the day, having risen from 0.7669 to 0.7754 on Tuesday.

Technical levels