Aussie fell today as Australia inflation figures disappointed traders during early Wednesday. Also adding to the Aussie’s weakness is the stimulus withdrawal pessimism and the Us dollar strength.

Australian consumer prices rose by much less than expected last quarter while core inflation increased by the weakest pace on record, which clearly signals monetary policy could stay super loose for a long time to come.

The consumer price index rose 0.6% in the March quarter from the prior three-month period, undershooting market forecasts for a 0.9% rise and also staying below 1.4% market expectations to 1.1%

The annual pace picked up to 1.1%, from 0.9%, but again missed forecasts of 1.4%, and remained far below the Reserve Bank of Australia’s (RBA) target band of 2-3%.

A key measure of trimmed mean inflation rose a surprisingly low 0.3% in the quarter, while the annual pace, at 1.1%, was the weakest on record.

Today global rating agency Fitch said that , “Withdrawal of central bank credit and QE measures pose the most serious risk for Australian credit markets over next 12 months.” On the other hand, Westpac mentioned,” We are forecasting that the RBA will extend its Quantitative Easing program (QE) with a third $100 billion program (QE3), which will begin in the first week of September.”

Elsewhere, After a call with the US Treasury Secretary Janet Yellen, the UK Finance Minister Rishi Sunak and New Zealand’s Finance Minister Grant Robertson, Australia’s Treasurer Josh Frydenberg said the media that “Today Australia hosted a call with the Finance Ministers of the United States , the United Kingdom and New Zealand.” This call built on our discussions from last year, to share experiences managing the COVID‑19 crisis.” During the call we exchanged views on our policy responses, and discussed our respective fiscal positions and strategies to support a robust economic recovery.” We agreed to remain in regular contact as a group and will continue to work together in responding to the challenges we face.”

AUD/USD 4 Hour Chart:

Support: 0.7752 (S1), 0.7736 (S2), 0.7710 (S3).

Resistance: 0.7794 (R1), 0.7820 (R2), 0.7837 (R3).

The Australia inflation data which rose concern among the traders and impacted Aussie negatively, we expect a bearish trend for AUD/USD.