AUD/USD little changed after the Australian inflation data – minor wobble

The Australian inflation data came in around expectations, and not enough to move the needle on RBA rate hikes:

• Australian Q3 inflation headline 2.8% y/y (expected 2.9%)

You’ll see in that data post that the monthly reading was a very nice 2.1%, but it’s the quarterly, headline 2.8%, core 3.5%, that is (are) the official number(s).

The headline was the lowest since early back in 2021. However, core stayed elevated above the top of the RBA’s target band , this is 2 to 3% (in a nutshell).

Headline inflation was driven lower by government cost-of-living subsidies and lower petrol (gasoline for those that spell it like that) prices. Services inflation remains sticky high.

As I said earlier:

• The Reserve Bank of Australia meet again on November 4 and 5. There will be no rate cut at this meeting given these numbers.
• There is a final meeting on December 9 -10 and I’d suggest no cut then either.
• February remains a top choice among analysts.

I’m beginning to worry about February! If the labour market remains strong (the latest data was strong again) and underlying inflation remains high we might be looking out to April/May for a cut!

RBA dates ahead for 2025:

AUD/USD is little changed around 0.6560.

This article was written by Eamonn Sheridan at www.forexlive.com.