Australian Dollar Steady Ahead of CPI Data
The Australian dollar was little changed around $0.70, staying near four-week highs as investors braced for the upcoming inflation data that could boost expectations for another interest rate hike. The third-quarter CPI report is due Wednesday, with underlying inflation expected to rise by a sharp 1.0% quarter-on-quarter, keeping the annual rate at 3.6%. That would leave inflation well above the Reserve Bank of Australia’s 2%—3% target range and could bolster the case for a fifth rate hike this year. RBA Governor Michele Bullock and other senior officials are also scheduled to appear before lawmakers as the data is released, putting them under pressure to respond to the latest inflation figures and their implications for the policy outlook. Markets are pricing in a 66% chance of a 25-basis-point RBA rate hike to 4.85% at its November 3 meeting, with the move widely expected to mark the peak of the current tightening cycle.
The Australian dollar was little changed around $0.70, staying near four-week highs as investors braced for the upcoming inflation data that could boost expectations for another interest rate hike. The third-quarter CPI report is due Wednesday, with underlying inflation expected to rise by a sharp 1.0% quarter-on-quarter, keeping the annual rate at 3.6%. That would leave inflation well above the Reserve Bank of Australia’s 2%—3% target range and could bolster the case for a fifth rate hike this year.
RBA Governor Michele Bullock and other senior officials are also scheduled to appear before lawmakers as the data is released, putting them under pressure to respond to the latest inflation figures and their implications for the policy outlook. Markets are pricing in a 66% chance of a 25-basis-point RBA rate hike to 4.85% at its November 3 meeting, with the move widely expected to mark the peak of the current tightening cycle.