AUD/USD dips amid Waller’s hawkish comments ahead of Aussie’s Retail Sales

■  AUD/USD falls following Federal Reserve Governor Waller's hawkish remarks on interest rates.

■  Australian inflation remains steady at 3.4% YoY as traders digest implications for RBA’s monetary policy.

■  Upcoming Australian Housing Credit and Retail Sales data eyed for further insight into domestic economic conditions.

The Australian Dollar finished Wednesday’s session virtually unchanged against the US Dollar following the Aussie’s inflation report and a scarce economic docket in the United States (US). Nevertheless, hawkish comments by Federal Reserve Governor Christopher Waller tumbled the AUD/USD as the Asian session began and traded at 0.6524, down 0.14%.

Australian Dollar adjusts to Fed's rate expectations and domestic inflation figures

Waller commented at a speech that rates need to be higher for longer than expected and the need to see more inflation progress before supporting a rate cut. He sees the beginning of the easing cycle in 2024, though he suggests the need to see back-to-back months of inflation data heading to 2%.

Wall Street finished the session mixed, while US Treasury yields tumbled and the Greenback stood flat at 104.29.

The US economic docket was empty on Wednesday. Conversely, Australia’s economic calendar revealed that February’s inflation hit 3.4% YoY for the third straight month. Up next, Housing Credit data for February will be released following Januar’s print of 0.4% MoM. Alongside that, Retail Sales for the same period are expected to slow from 1.1% to 0.4% MoM.

AUD/USD Price Analysis: Technical outlook

After Waller’s remarks, the AUD/USD pushed far below the 200-day moving average (DMA) of 0.6547, with the pair aiming to challenge Wednesday’s lows of 0.6511. Further weakness will drive the pair to test 0.6500, followed by the March 5 low of 0.6477, ahead of the February 13 low of 0.6442.

Otherwise if buyers reclaim the confluence of the 200-DMA and the 50-DMA, that could open the door to challenge the 100-DMA at 0.6592.