Inflation in Australia remains flat, and below the lower end of the 2% to 3% RBA target band.
Many analysts were expecting an uptick in the CPI inflation reading to 2.3%, which could prompt the RBA to shift its neutral-bias to a tighter posture.
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As a result, the AUD/USD fell to a 3-month low of .7455 overnight. With the RBA meeting next week, any mention of a more benign inflation outlook would put more downside pressure on the Aussie.
Internal price indicators now point the the next support level at .7420 and a more significant target of .7365 over the near-term.
Over the last few weeks, we have been suggesting that investors look to buy the BetaShares YANK ETF to profit from a falling AUD/USD.
The YANK is an inverse ETF, with a 2.5% weighting. This means that YANK will gain 2.5% for every 1% drop in the AUD/USD.
