The Australian dollar, paired with the US dollar, looks promising mid-week. The current AUDUSD exchange rate is 0.6515, marking the highest level in almost two weeks.
Investors are reacting to fresh statistics on Australian inflation and believe that the Reserve Bank of Australia will not lower interest rates for now.
Australia's Consumer Price Index (CPI) dropped from 4.1% to 3.6% q/q in Q1. The figure exceeded the forecasted 3.4% level but continued to slow down for the fifth consecutive quarter. Data from earlier this week revealed the private sector's most impressive expansion in two years. Manufacturing activity in Australia approached the break-even point, while service sector activity reached its highest in three months. All this confirms that the Australian economy is stable and sturdy.
The prospect of the RBA keeping the interest rate unchanged logically supports the Aussie.
Additional support comes from the local weakness of the US dollar.