For the second month in a row, there is some tentatively encouraging news on inflation for the Reserve Bank of Australia. Monthly headline CPI eased to 3.5% year-on-year from 3.8% in July. That was above the consensus of 3.4%, but the slowdown in the trimmed mean (i.e. core) from 4.1% to 3.8% offset that, notes Francesco Pesole, FX strategist at ING.
AUD to test December 2023 highs at 0.6850
“The AUD followed Australian bond yields higher just after the release but is now trading back below 0.680. There are reasons to be cautiously optimistic about Australian disinflation at this point, but we still see market pricing for a December RBA cut as too dovish and think easing will only begin in 1Q25. Remember that RBA rates are at 4.35%, which is still below the expected Fed and RBNZ rates (both 4.50%) by year-end.”
“A short-term bounce in the USD may put some pressure on the AUD, but it seems too early to rule out a test of the December 2023 highs at 0.6850.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
